ZDT Limited Uses a Standard Costing System for All Its

Multiple Choice

ZDT Limited uses a standard costing system for all its products. ZDT Limited produces box files. The standard direct labour time to produce one box file is 5 minutes and the standard cost of labour is £10 per direct labour hour. Budgeted production is 21,000 box files per month with budgeted labour hours of 1,750 per month. In October, ZDT Limited produced 24,000 box files and total labour hours paid were 1,950. Direct labour cost for the month was £20,280. What is the direct labour rate variance for October?

A) £280 Unfavourable
B) £500 Favourable
C) £780 Unfavourable
D) £2,000 Unfavourable