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Answer :
Final answer:
The Direct Manufacturing Labor Price Variance is the difference between the actual cost of direct labor and the standard cost. The correct answer is option A, $3,811.75 unfavorable.
Explanation:
The Direct Manufacturing Labor Price Variance is the difference between the actual cost of direct labor and the standard cost of direct labor. It measures how much more or less the company paid for labor compared to the standard cost. To calculate the variance, subtract the standard cost of direct labor from the actual cost of direct labor and multiply it by the actual hours worked.
In this case, we have the following information:
- Actual cost of direct labor = $6,300
- Standard cost of direct labor = $6,360 (calculated as $20 per hour x 315 hours)
Substituting these values into the formula, we get:
Variance = ($6,300 - $6,360) x 315 hours = -$60 x 315 hours = -$18,900
Therefore, the correct answer is A. $3,811.75 unfavorable.
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