The Pottery Limited Uses a Standard Costing System for All

Multiple Choice

The Pottery Limited uses a standard costing system for all its products. The Pottery Limited produces decorative vases. The standard direct labour time to paint one decorative vase is 2 hours and the standard cost of labour is £16 per direct labour hour. Budgeted production is 1,000 decorative vases per month with budgeted labour hours of 2,000 per month. In April, The Pottery Limited produced 1,050 decorative vases and incurred total labour costs for painting the vases of £33,075, paying £17.50 per hour for labour. What is the direct labour rate variance for April?

A) £525 Favourable
B) £2,835 Unfavourable
C) £3,150 Unfavourable
D) £3,360 Favourable