Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour. During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. The labor quantity variance was A) $3660 F B) $3600 U C) $2460 U D) $3660 U

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Business

Giuliana

3 October, 00:01

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour. During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. The labor quantity variance was A) $3660 F B) $3600 U C) $2460 U D) $3660 U

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Joe · Answer 1

The correct answer is B) $3600 U.

Explanation:

The labor quantity variance is difference between actual hours consumed to produce the product and standard hour that should be taken to produce the product. The detail calculation are given below.

labor quantity variance = Standard rate (Standard quantity - actual quantity)

= 18 (4,000-4,200)

= $ 3,600 un-favorable

Labor quantity variance is un-favorable. Which means more labor cost due to more labor hour comsumed.