CBC Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock. The company's standard labor cost is $14 per hour. During June, the company produced 6,200 stopwatches and used 13,100 hours of direct labor at a total cost of $262,000. What is CBC's direct labor rate variance for June? O $78,600 unfavorable O $78,600 favorable O $700 favorable O $700 unfavorable
CBC Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock. The company's standard labor cost is $14 per hour. During June, the company produced 6,200 stopwatches and used 13,100 hours of direct labor at a total cost of $262,000. What is CBC's direct labor rate variance for June? O $78,600 unfavorable O $78,600 favorable O $700 favorable O $700 unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:CBC Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock.
The company's standard labor cost is $14 per hour. During June, the company produced 6,200 stopwatches and used 13,100
hours of direct labor at a total cost of $262,000. What is CBC's direct labor rate variance for June?
O $78,600 unfavorable
$78,600 favorable
O $700 favorable
O $700 unfavorable
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