Borabora 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 $52,250 for 4,750 hours worked.Direct labor is measured in labor hours.What is the direct labor quantity variance?
A)$2,500 Favorable
B)$2,500 Unfavorable
C)$2,750 Favorable
D)$2,750 Unfavorable

Question

Quizplus · Accepted Answer

The direct labor quantity variance is calculated as follows:Actual labor hours - Standard labor hours * Standard labor rate4,750 hours - (2,500 units * 2 hours per unit) * $10 per hour4,750 hours - 50,000 hours * $10 per hour4,750 hours - $500,000$2,750 Favorable

Borabora Company Produces 2,500 Units