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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Business

Jarvis

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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Sarahi Gibson · Answer 1

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