A job was budgeted for $42,000 of labor but is now forecast at $46,200. What is the labor cost variance?
Correct Answer
D) $4,200 unfavorable.
The forecast exceeds budget by $4,200, so the variance is unfavorable.
Why This Is the Correct Answer
The forecast exceeds budget by $4,200, so the variance is unfavorable.
Why the Other Options Are Wrong
Option A: $2,100 unfavorable.
$2,100 unfavorable. is below the supported result for budget variance; it likely uses the wrong base, period, or account bucket.
Option B: $2,100 favorable.
$2,100 favorable. is below the supported result for budget variance; it likely uses the wrong base, period, or account bucket.
Option C: $4,200 favorable.
$4,200 favorable. is not aligned with the supported result for budget variance; it has the wrong label or classification even if the number looks close.
Memory Technique
Reviewing Labor money test: bucket before math for budget variance.
Reference Hint
Study anchor (closed-book): memorize Budget variance from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
More Law & Business Questions
A Fresno homeowner wants a $725 cabinet repair and trim adjustment. Which contract step best matches CA home improvement requirements?
A project has $6,500 retainage withheld. The owner releases 60 percent of retainage at substantial completion. How much cash is released?
Cash is $52,500 and monthly burn is $17,500. How many months of runway are available?
A supplier offers 1.5 percent early-pay discount on a $22,000 invoice. What is the discount?
A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?
A job is estimated to cost $135,000. What price gives a 25 percent gross margin?
A customer invoice of $4,000 has a stated late charge of 1.5 percent. What late charge is added?
A bid has direct labor of $18,000, materials of $12,500, and equipment rental of $3,500. If the contractor adds 20 percent markup on direct cost, what is the bid price?
A contractor wants a 25 percent gross margin on a job with estimated cost of $60,000. What selling price gives that margin?
A completed project sold for $150,000 and had total cost of $126,000. What gross margin percentage did the project earn?