Sunset Beverages gathered the following information for Job #341: $$\begin{array} { | l | c | c | }
\hline & \text { Standard Total Cost } & \text { Actual Total Cost } \
\hline \text { Direct materials: } & & \
\hline \text { Standard: 2,000 pints at \$4/pint } & \$ 8,000 & \
\hline \text { Actual: 2,150 pints at \$4.50/pint } & &\$9,675 \
\hline \text { Direct labor: } & & \
\hline \text { Standard: } 500 \text { hours at } \$ 7.50 / \mathrm { hr } & 3,750 & \
\hline \text { Actual: } 480 \text { hours at } \$ 7.25 / \mathrm { hr } & & 3,480 \
\hline
\end{array}$$
- What is the direct labor price variance?

Question

Sunset Beverages gathered the following information for Job #341: $$\begin{array} { | l | c | c | } 
\hline & \text { Standard Total Cost } & \text { Actual Total Cost } \
\hline \text { Direct materials: } & & \
\hline \text { Standard: 2,000 pints at \$4/pint } & \$ 8,000 & \
\hline \text { Actual: 2,150 pints at \$4.50/pint } & &\$9,675 \
\hline \text { Direct labor: } & & \
\hline \text { Standard: } 500 \text { hours at } \$ 7.50 / \mathrm { hr } & 3,750 & \
\hline \text { Actual: } 480 \text { hours at } \$ 7.25 / \mathrm { hr } & & 3,480 \
\hline
\end{array}$$
- What is the direct labor price variance?

Quizplus · Accepted Answer

The direct labor price variance is calculated as (Actual Hours x (Standard Rate - Actual Rate)). Here, it is 480 hours x ($7.50 - $7.25) = $120 favorable.

Sunset Beverages Gathered the Following Information for Job #341 - What Is the Direct Labor Price Variance? A)$120 Favorable

Sunset Beverages Gathered the Following Information for Job #341 - What Is the Direct Labor Price Variance?
A)$120 Favorable