Reference no: EM133072358

Question - A company uses the following standard costs to produce a single unit of output.

Direct materials 7 pounds at $0.70 per pound = $ 4.90

Direct labor 0.4 hour at $10.00 per hour 4.00

Manufacturing overhead 0.4 hour at $3.70 per hour 1.48

During the latest month, the company purchased and used 66,000 pounds of direct materials at a price of $0.90 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $37,440 based on 3,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $10,800 and fixed manufacturing overhead incurred was $16,000. Based on this information, compute the total direct labor variance for the month?

a. $1,000 unfavorable

b. $2,560 favorable

c. $1,560 unfavorable

d. $1,000 favorable

e. $1,560 favorable