Rodriguez Company produces 2,500 units. Each unit was expected to require 2 labor hours at a cost of $10 per hour. Total labor cost was $55,250 for 4,750 hours worked. Direct labor is measured in hours. is the total flexible- budget variance for direct labor.
A) $5,250 unfavorable
B) $7,500 favorable
C) $5,250 favorable
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

The flexible budget for labor cost is 2,500 units x 2 hours/unit x $10/hour = $50,000. The actual labor cost was $55,250, resulting in a variance of $55,250 - $50,000 = $5,250 unfavorable.

Rodriguez Company Produces 2,500 Units