Question

Assume the following: The standard labor rate is $8.50 per hour. The standard quantity of labor allowed per unit is 4 hours. The company paid $342,000 for 38,000 hours of labor. The company actually produced 10,000 units of finished goods during the period. What is the labor efficiency variance

Answer 1

Answer: 17000F

Step-by-step explanation:

The labor efficiency variance based on the information provided in the question would be calculated as:

= (Standard hours - Actual hours) × Standard rate

= (40000 - 38000) × 8.50

= 2000 × 8.50

= 17000 favourable

Note;

Standard hours = 10000 × 4 hours = 40,000 hours