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Hollowell Audio, Inc., manufactures military specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: |
| Standard Hours |
Standard Rate |
Standard Cost |
| 27 minutes | $5.80 | $2.61 |
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During July, 9,675 hours of direct labor time were required to make 19,900 discs. The direct labor cost totaled $54,180 for the month. |
| Required: | |
| 1a. |
According to the standards, what direct labor cost should have been incurred to make the 19,900 discs? |
| Total standard direct labor cost | $ |
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1b.By how much does this differ from the cost that was incurred?
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