ABC Limited Uses a Standard Costing System for All Its

Multiple Choice

ABC Limited uses a standard costing system for all its products. ABC Limited produces shirts. Each shirt uses a standard 8 hours of direct labour at a standard rate of pay of £10 per direct labour hour. Budgeted production is 5,000 shirts per annum. During the financial year ended 30 April 2019, ABC produced 5,500 shirts. The cost of each direct labour hour was £9.60 and a total of 45,000 direct labour hours were paid. Based on the above information, what is the direct labour total variance for the year ended 30 April 2019?

A) £8,000 Favourable
B) £10,000 Unfavourable
C) £18,000 Favourable
D) £32,000 Unfavourable