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Question

This Test: 100 pts possible This Question: 10 pts 1 of 10 (0 complete) = Question Help The Ticktock Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock. Ticktock's standard labor cost is $12.00 per hour. During June, Ticktock produced 6,200 stopwatches and used 13,800 hours of direct labor at a total cost of $179,400. What is Ticktock's direct labor rate variance for June? O A. $1,400 unfavorable O B. $13,800 favorable O C. $1,400 favorable O D. $13,800 unfavorable

Explanation / Answer

Calculation of Direct Labor Rate Variance:

Direct Labor Rate Variance = (Standard Rate per hour - Actual rate per hour) x Actual hours worked
= {$12 - ($179,400/13,800)} x 13,800
= ($12 - $13) x 13,800
   = $13,800 Unfavorable

Option D. $13,800 Unfavorable is correct answer.

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