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The Clarke Company developed the following standards for the manufacture of its product: Each unit should...

The Clarke Company developed the following standards for the manufacture of its product:

  • Each unit should have 4 pounds of direct materials purchased at $12 per pound.
  • Each unit should be produced in 2 hours at a direct labor cost of $20 per hour.

Actual production was 12,000 units using 49,000 pounds of direct materials at a total cost of $586,200 and required 23,500 direct labor hours at a total cost of $479,000. What was the direct labor "quantity" variance for the company? Use a positive number to indicate a favorable variance or a negative number to indicate an unfavorable variance.

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Answer #1

Answer : $ 10000 Favorable

>> Direct Labor quantity variance = ( Standard hours - Actual hours ) * Standard Rate.

>> Direct Labor quantity variance = ( ( 12000 * 2 ) - 23500 ) * $ 20 = $ 10000 Favorable

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