For the following problems, use the formulas given:

Direct Labor Variances

Actual cost = Actual hours* Standard cost =

Actual hours * Standard rate Standard hours *

Actual rate Standard rate

Direct labor rate variance Direct labor time variance

Total direct labor cost variance

The following data relate to direct labor costs for the current period:

Standard hours 6,000 hours @ $11.50

Actual costs 7,500 hours @ $12.00

5. What is the direct labor rate variance?

$15,000 unfavorable

$3,000 favorable

$3,750 unfavorable

$2,400 favorable

The following data relate to direct labor costs for the current period:

Standard costs 36,000 hours @ $22.50

Actual costs 35,000 hours @ $23.00

6. What is the direct labor time variance?

$17,500 unfavorable

$18,000 unfavorable

$5,000 favorable

$22,500 favorable

The following data relate to direct labor costs for the current period:

Standard costs 8,000 hours @ $9.50

Actual costs 8,250 hours @ $10.00

7. What is the direct labor cost variance?

$17,500 unfavorable

$6,500 unfavorable

$5,000 favorable

$22,500 favorable

8. When the supervisor has responsibility for future expansion, profits, hiring costs and the authority to spend money for a business segment, that segment is called a (an):

Cost center

Profit center

Investment center

Service department

9. The accounting department of Trotter Co. prepares payroll checks for the entire company