Question
Elegant Designs manufactures decorative chains for all types of clothing and household needs. The company uses standard costs to prepare its flexible budget. For the
Elegant Designs manufactures decorative chains for all types of clothing and household needs. The company uses standard costs to prepare its flexible budget. For the second quarter of 20x8, direct material and direct labor standards for the companys most popular product were as follows: Direct material: 3 pounds per unit; $4 per pound Direct labor: 4 hours per unit; $20 per hour During the quarter, Elegant Designs produced 5,000 units. At the end of the quarter, direct labor costs recorded were $375,000 for 25,000 direct labor hours used. Based on these data, what is the direct labor cost variance?
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$300,000 F.
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$300,000 U.
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$125,000 U.
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None of the answers is correct.
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$125,000 F.
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