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The Ford 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.

The Ford 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 3 hours at a direct labor cost of $18 per hour.

Actual production was 40,000 units using 162,800 pounds of direct materials at a total cost of $1,960,300 and required 109,400 direct labor hours at a total cost of $1,820,600. What was the direct labor “cost” variance?¬†Use a positive number to indicate a favorable variance or a negative number to indicate an unfavorable variance.

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