Question

The standard rate of pay is $12 per direct labor hour. if the actual direct labor payroll was $47,040 for 4,000 direct labor hours worked, the direct labor price (rate) variance is select one:
a. $960 unfavorable.

b. $960 favorable.

c. $1,200 unfavorable.

d. $1,200 favorable.

Answer 1

i think the answer is B

Answer 2

Answer:

"B"

Explanation:

Variance analysis is a performance tool used in evaluating the differences in the budgeted , standard and actual performance purposely to know how well a production process is fairing and any room for improvement.

If the standard direct labor rate is $12, then the standard labor cost is $4000*12 = $4,800.

In the situation where the actual direct labor cost is $47,040 , that means that a value of $960 has been saved on the direct labor cost which is a favorable variance.