The standard cost of labour for Product Y is £15 per unit of production. The results for February show an unfavourable direct labour rate variance of £500 and a favourable direct labour efficiency variance of £700. Actual production for February was 2,500 units of Product Y. What was the actual direct labour cost of Product Y for February?
A) £37,300
B) £37,500
C) £37,700
D) £38,700

Question

Quizplus · Accepted Answer

Actual direct labour cost = Standard cost per unit * Actual production + Direct labour rate variance - Direct labour efficiency variance= £15 * 2,500 + £500 - £700= £37,300

The Standard Cost of Labour for Product Y Is £15