FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**The Russell Company Standard Cost Data**

The Russell Company provides the following standard cost data per unit of product:

- **Direct Material:** 3 gallons at $3 per gallon = $9.00
- **Direct Labor:** 2 hours at $13 per hour = $26.00

During the period, the company produced and sold 24,000 units, incurring the following actual costs:

- **Direct Material:** 75,000 gallons at $2.90 per gallon
- **Direct Labor:** 48,500 hours at $12.75 per hour

**The direct labor usage variance was:**

- Multiple Choice:
  - $6,500 unfavorable.
  - $6,375 unfavorable.

This section includes a cost variance analysis with a focus on direct labor usage, requiring a calculation of how actual costs compare to standard costs.
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Transcribed Image Text:**The Russell Company Standard Cost Data** The Russell Company provides the following standard cost data per unit of product: - **Direct Material:** 3 gallons at $3 per gallon = $9.00 - **Direct Labor:** 2 hours at $13 per hour = $26.00 During the period, the company produced and sold 24,000 units, incurring the following actual costs: - **Direct Material:** 75,000 gallons at $2.90 per gallon - **Direct Labor:** 48,500 hours at $12.75 per hour **The direct labor usage variance was:** - Multiple Choice: - $6,500 unfavorable. - $6,375 unfavorable. This section includes a cost variance analysis with a focus on direct labor usage, requiring a calculation of how actual costs compare to standard costs.
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