Bok Company's output for the current period was assigned a $400,000 standard direct labor cost. The direct labor variances included a $10,000 unfavorable direct labor rate variance and a $4,000 favorable direct labor efficiency variance. What is the actual total direct labor cost for the current period?
A) $414,000.
B) $386,000.
C) $394,000.
D) $406,000.
E) $410,000.

Question

Quizplus · Accepted Answer

The actual total direct labor cost is calculated by adjusting the standard direct labor cost with the variances. The standard cost is $400,000, with a $10,000 unfavorable rate variance (increasing cost) and a $4,000 favorable efficiency variance (decreasing cost). Therefore, the actual cost is $400,000 + $10,000 - $4,000 = $406,000.

Bok Company's Output for the Current Period Was Assigned a $400,000