Choco Sweet Inc.gives you the following information: The standard labor time of 0.75 labor hour is required to produce one unit.The standard labor cost for a 10 pound bag of chocolate is $8 per labor hour.The following is data relating to the actual cost and usage data.

-Using the above information provided for Choco Sweet,compute the direct labor variance for Choco Sweet Inc.
A)$11,688 (
B)$8,500 (
C)$2,500 (
D)$11,688 (

Question

Choco Sweet Inc.gives you the following information: The standard labor time of 0.75 labor hour is required to produce one unit.The standard labor cost for a 10 pound bag of chocolate is $8 per labor hour.The following is data relating to the actual cost and usage data.
 
-Using the above information provided for Choco Sweet,compute the direct labor variance for Choco Sweet Inc.
A)$11,688 (
B)$8,500 (
C)$2,500 (
D)$11,688 (

Quizplus · Accepted Answer

Standard labor cost per unit = 0.75 labor hours per unit x $8 per labor hour = $6 per unit
Actual labor cost per unit = $9.50 per unit
Direct labor variance = (Standard labor cost per unit - Actual labor cost per unit) x Actual quantity
Direct labor variance = ($6 - $9.50) x 3200 units = $-11,200 (F)
Therefore, the correct answer is B - $8,500 (F).