Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: The direct labor flexible-budget variance for December (rounded to the nearest dollar) was:
A) $1,590 favorable.
B) $5,650 unfavorable.
C) $7,040 unfavorable.
D) $9,830 unfavorable.

Question

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: The direct labor flexible-budget variance for December (rounded to the nearest dollar) was:
A) $1,590 favorable. 
B) $5,650 unfavorable. 
C) $7,040 unfavorable. 
D) $9,830 unfavorable.

Quizplus · Accepted Answer

The Answer of Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: The direct labor flexible-budget variance for December (rounded to the nearest dollar) was:
A) $1,590 favorable. 
B) $5,650 unfavorable. 
C) $7,040 unfavorable. 
D) $9,830 unfavorable.

Shade Company Adopted a Standard Cost System Several Years Ago