Question 13 2 pts Party Time Products has the following standard costs for its s

Question

Question 13 2 pts Party Time Products has the following standard costs for its sole product Direct Materials (2 pounds at $4.50 per pound) $9.00 per unit $7.20 per unit Direct Labor (0.6 hours at $12.00 per hour) During August, Party Time produced 2,000 units, bought and used 4,200 pounds of direct material at $4.80 per pound, and used 1,100 hours of labor at a total cost of $14,025 Based on this information, what is the direct labor rate variance? O $825 unfavorable $900 unfavorable O $900 favorable $825 favorable

Explanation / Answer

Direct Labor Rate Variance = (Actual Rate * Actual Hours ) - ( Actual Hours * Standard Rate)

= $ 14,025 - (1,100 * $ 12)

= $ 14,025 - $ 13,200

= $ 825 Unfavorable

Since the actual cost incurred is more than the standard cost, hence the variance is unfavorable.

Hence the correct answer is $ 825 Unfavorable.

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