The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:
A)$4,440 unfavorable.
B)$4,500 favorable.
C)$4,440 favorable.
D)$4,500 unfavorable.

Question

Quizplus · Accepted Answer

We need to calculate the difference between the actual cost and standard cost of direct labor. 
Standard cost for direct labor = $16 per unit x 2,500 units = $40,000 
Actual cost for direct labor = $15 per unit x 2,500 units = $37,500 
Difference = Standard cost - Actual cost 
= $40,000 - $37,500 
= $2,500 favorable 
Therefore, the correct answer is C) $4,440 favorable.

The Standard Costs and Actual Costs for Direct Labor for the Manufacture