Question

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.8 hours Standard labor rate $13.60 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,600 hours Actual total labor cost $100,320 Actual output 950 units What is the labor efficiency variance for the month?

Answer 1

the labor efficiency variance for the month is $23,256 Favorable.

Step-by-step explanation:

Labor efficiency variance = (Aq × SP) - (Sq × Sp)

= (7,600 × $13.60) - ((950 × 9.8) × $13.60)

= (7,600 × $13.60) - (9.310 × $13.60)

= $23,256 Favorable