QRS Limited Uses a Standard Costing System for All Its

Multiple Choice

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product D. The standard direct labour hours for Product D are 2½ hours at £8 per direct labour hour. Budgeted production of Product D is 3,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,500 units of Product D. Total direct labour cost for the year was £79,800 at a rate of £7.60 per hour. What is the direct labour rate variance for Product D for the financial year ended 31 October 2019?

A) £3,600 Favourable
B) £4,200 Favourable
C) £9,800 Unfavourable
D) £14,000 Unfavourable