Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January 2000 products are produced using 6300 direct labor hours. Monster's actual payroll during January was $98280. What is the labor quantity variance?
A) $2280 U
B) $4800 F
C) $2520 F
D) $4800 U

Question

Quizplus · Accepted Answer

The labor quantity variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard Hours for 2000 products is 2000 x 3 = 6000 hours. The variance is (6300 - 6000) x $16 = $4800 Unfavorable.

Monster Company Produces a Product Requiring 3 Direct Labor Hours