Question

Microsleeve Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,100 direct labor hours. Monster’s actual payroll during January was $98,280.

What is the labor quantity variance?

Answer 1

Direct labor quantity variance = (standard hours worked for actual production - actual hour worked)*standard rate per direct labor hour

standard hours worked for actual production = standard hours required per unit of production * actual units produced

= 3*2000

= 6000 hours

Actual hour worked = 6100 direct labor hours (given in question)

standard rate per direct labor hour = $ 16 (given in question)

put the values in above quantity variance formula

= (6000 - 6100)*16

= 1600 U

U means unfavorable.

Please check with your answer and let me know.