Question

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 10.1 hours Standard labor rate $ 13.90 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,900 hours Actual total labor cost $ 106,650 Actual output 1,100 units What is the labor efficiency variance for the month

Answer 1

44,619 favorable

Step-by-step explanation:

WORK:

Direct labor efficiency variance

= (Standard hours - Actual hours)*Standard rate

= (11,110-7900)*13.90

=3,210*13.90

= 44,619 favorable

Therefore the labor efficiency variance for the month is 44,619 favorable

Standard hours = Standard labor-hours per unit of output*Actual output

= 10.1*1,100

= 11,110