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3 September, 14:34

Frontera Company's output for the current period results in a $20,000 unfavorable direct labor rate variance and a $10,000 unfavorable direct labor efficiency variance. Production for the current period was assigned a $400,000 standard direct labor cost. What is the actual total direct labor cost for the current period?

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  1. 3 September, 17:47
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    Answer: $430,000

    Explanation: The amount of wages and salaries paid to employees involved in the process of production is called direct labor cost. It can be computed as follows : -

    Actual total direct labor cost = Standard direct labor cost + unfavorable direct labor rate variance + unfavorable direct labor efficiency variance

    = $ 400,000 + $ 20,000 + $ 10,000

    = $430,000
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