What is the direct labor spending variance? Multiple Choice $600 F $600 U $3,300 F $3,300 U
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.
What is the direct labor spending variance?
Multiple Choice
-
$600 F
-
$600 U
-
$3,300 F
-
$3,300 U
![Assume the following information appears in the standard cost card for a business that makes only one product:
Standard Quantity
or Hours
5 pounds
Standard Price
or Rate
$11.00 per pound
$17.00 per hour
$ 3.00 per hour
Standard Cost
$55.00
$34.00
Direct materials
Direct labor
2 hours
Variable manufacturing overhead
2 hours
$ 6.00
During the most recent period, the following additional information was available:
• 20,000 pounds of material was purchased at a cost of $10.50 per pound.
All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0645e147-29a8-4628-8f33-7f2f84147d93%2Fc1512c19-2b5f-4848-b9b2-03a6bf186201%2F8vrprh5_processed.png&w=3840&q=75)
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