Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor cost variance for August?

Question

Quizplus · Accepted Answer

The standard labor cost for 10,000 carvings should have been:

10,000 carvings x 2 hours per carving x $12 per hour = $240,000

The actual labor cost was $250,376.

Labor cost variance = actual labor cost - standard labor cost

Labor cost variance = $250,376 - $240,000 = $10,376 unfavorable.

Therefore, the correct answer is A, $10,376 unfavorable.