Madrid Company has a direct labor standard of 4 hours per unit of output, and a standard wage rate of $12.00 per hour. During February, Madrid Company paid $100,300 to employees for 9,180 hours worked, and 2,440 units were produced during that time. What is the direct labor rate variance? Note: Do not round your intermediate calculations. Multiple Choice $9,012 favorable $6,960 unfavorable $9,860 favorable $16,820 favorable
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Madrid Company has a direct labor standard of 4 hours per unit of output, and a standard wage rate of $12.00 per hour. During February, Madrid Company paid $100,300 to employees for 9,180 hours worked, and 2,440 units were produced during that time. What is the direct labor rate variance?
Note: Do not round your intermediate calculations.
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$9,012 favorable
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$6,960 unfavorable
-
$9,860 favorable
-
$16,820 favorable
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