Cabot Company collected the following data regarding production of one of its products. Compute the direct labor cost variance.
A) $53,500 unfavorable.
B) $40,500 favorable.
C) $53,500 favorable.
D) $13,000 unfavorable.
E) $40,500 unfavorable.

Question

Quizplus · Accepted Answer

The direct labor cost variance is calculated as the difference between the actual labor cost and the standard labor cost for the actual production level. The given answer of $53,500 unfavorable indicates that the actual labor costs were higher than the standard costs by this amount.

Cabot Company Collected the Following Data Regarding Production of One