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, 5,000 units were produced and 24,500 direct labor hours were actually worked at a total cost of $285,000. The direct labor quantity variance was

a.$6,000 favorable.
b.$6,000 unfavorable.
c.$9,000 unfavorable.
d.$9,000 favorable.

Answer 1

The direct labor quantity variance is $6,000 unfavorable.

Step-by-step explanation:

The direct labor quantity variance can be calculated using the formula:

Direct Labor Quantity Variance = (Standard Quantity of Labor - Actual Quantity of Labor) x Standard Rate of Pay

In this case, the standard quantity of labor is 5 direct labor hours per unit and the actual quantity of labor is 24,500 direct labor hours for 5,000 units produced. Therefore, the direct labor quantity variance is:

Direct Labor Quantity Variance = (5 x 5,000 - 24,500) x 12 = $6,000 unfavorable