Mandy Company has the following information from last month:$\begin{array}{lr}
\text { Standard direct labor hours allowed for units produced (SQ) } & 3,600 \
\text { Actual direct labor hours worked (AQ) } & 3,480 \
\text { Direct labor efficiency variance, favorable (F) } & \$ 5,760 \
\text { Total payroll } & \$ 187,920
\end{array}$What was Mandy's direct labor flexible-budget variance for the month, rounded to the nearest dollar?
A) $15,120 unfavorable.
B) $20,800 unfavorable.
C) $36,720 favorable.
D) $42,480 favorable.
E) $79,920 favorable.

Question

Quizplus · Accepted Answer

The direct labor flexible-budget variance is calculated as the difference between the actual direct labor hours worked and the standard direct labor hours allowed for the units produced, multiplied by the standard direct labor rate. In this case, the actual direct labor hours worked were 3,480, the standard direct labor hours allowed for the units produced were 3,600, and the standard direct labor rate is not given. However, we can calculate the standard direct labor rate by dividing the total payroll by the standard direct labor hours allowed for the units produced. This gives us a standard direct labor rate of $187,920 / 3,600 = $52.20 per hour. Therefore, the direct labor flexible-budget variance is (3,480 - 3,600) * $52.20 = -$15,120.

Mandy Company Has the Following Information from Last Month What Was Mandy's Direct Labor Flexible-Budget Variance for the Month