Thomas Corporation produces stopwatches. According to company standards, it should take 1 hour of direct labour to produce a stopwatch. Thomas' standard labour cost is $18 per hour. During June, Thomas produced 5,000 stopwatches and used 5,150 hours of direct labour at a total cost of $102,500. What is Thomas' direct labour price variance for June?

Question

Quizplus · Accepted Answer

D) Labour price var. = (Actual price per unit - Std price per unit) × actual quantity
$9800 U = ({102,500/5150} - $18 ) × 5150

Thomas Corporation Produces Stopwatches