Dem Mfg. has gathered the following data in preparing to record their direct labour payroll costs for the week: Actual hours worked 18,500
Standard hours allowed 20,000
Total direct labour variance $8,300 F
Direct labour price variance $3,700 U
The actual direct labour costs were:
A)$144,300
B)$148,000
C)$160,000
D)$151,700

Question

Quizplus · Accepted Answer

The total direct labour variance is $8,300 F (favorable), which means the actual costs were $8,300 less than the standard costs. The direct labour price variance is $3,700 U (unfavorable), indicating that the actual rate was higher than the standard rate. To find the actual costs, we calculate the standard cost for the actual hours worked (18,500 hours) and adjust for the variances. The standard cost for 20,000 hours is $160,000 (since $160,000 - $8,300 = $151,700). Therefore, the actual direct labour costs were $151,700.

Dem Mfg Has Gathered the Following Data in Preparing to Record