Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the following standard costs for one of their most popular products.

During September, MCP produced and sold 2,000 units using 12,400 pounds of direct materials at an average cost per pound of $4.00 and 950 direct labor hours at an average wage of $15.15 per hour.
The direct labor price variance during September is ________.
A) $750.00 unfavorable
B) $150.00 favorable
C) $142.50 unfavorable
D) $142.50 favorable

Question

Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the following standard costs for one of their most popular products.

During September, MCP produced and sold 2,000 units using 12,400 pounds of direct materials at an average cost per pound of $4.00 and 950 direct labor hours at an average wage of $15.15 per hour.
The direct labor price variance during September is ________.
A) $750.00 unfavorable 
B) $150.00 favorable 
C) $142.50 unfavorable 
D) $142.50 favorable

Quizplus · Accepted Answer

Direct labor price variance = 950 dlh × ($15.15 - $15.00) = $142.50 U