Question

The standard direct labor cost for producing one unit of product is 5 direct labor hours at a standard rate of pay of $12. Last month, 15,000 units were produced and 73,500 direct labor hours were actually worked at a total cost of $810,000. The direct labor quantity variance was

A) $18,000 favorable

B) $18,000 unfavorable

c) $27,000 unfavorable

D) $27,000 favorable

Answer 1

Answer:

Given data :

one unit of product = 5 direct labor hours

standard rate of pay = $12

Number of units were produced = 15,000

number of direct labor hours were worked = 73,500

total cost =  $810,00

Now we have to find out the :

The direct labor quantity variance:

We know, the formula for the direct labor quantity variance is

Direct labor quantity variance = ( no.of units produced per unit  - total no.of daily labor hours ) * rate of pay

  = (15,000* 5 -73,500) * $12

= (75,000-73,500) *$12

= (1,500) *$12

= $18,000

Direct labor quantity variance = $18,000

from the question, option" B " is correct.

option B is $18,000 unfavorable