The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. If in producing 2500 units, the actual direct labor cost was $48825 for 3150 direct labor hours worked, the total direct labor variance is $4275 unfavorable.

Question

Areli Cabrera

Business

3 November, 08:06

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. If in producing 2500 units, the actual direct labor cost was $48825 for 3150 direct labor hours worked, the total direct labor variance is $4275 unfavorable.

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Answers (1)

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Ernest Moody · Answer 1

Total direct labour variance $

Standard direct labour cost (1.5 hours x $15 x 2,500) 56,250

Less: Actual direct labour cost 48,825

Total direct labour variance 7,425 (F)

Explanation:

Total direct labour variance is the difference between standard direct labour cost and actual direct labour cost. Standard direct labour cost is a function of standard hours per unit, standard rate and actual output produced.