Question

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.7 hours Standard labor rate $12.50 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 6,500 hours Actual total labor cost $78,650 Actual output 900 units What is the labor efficiency variance for the month

Answer 1

the labor efficiency variance for the month is $16,625 favorable

Step-by-step explanation:

The computation of the labor efficiency variance for the month is given below:

= Standard labor rate × (actual hours - actual output × standard hours per unit)

= $12.5 × (6,500 hours - 900 units × 8.7 hours)

= $16,625 Favorable

Hence, the labor efficiency variance for the month is $16,625 favorable

The same is relevant