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The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.9 hours Standard labor rate $13.70 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,700 hours Actual total labor cost $102,410 Actual output 1,000 units What is the labor efficiency variance for the month

Respuesta :

jepessoa

Answer:

-$30,250 favorable

Explanation:

labor efficiency variance = (standard quantity - actual quantity) x standard labor cost

  • actual quantity = 7,700 hours
  • standard quantity = 9.9 hours x 1,000 units = 9,900
  • standard labor cost = $13.70

labor efficiency variance = (7,700 - 9,900) x $13.70 = -$30,250 favorable variance

the variance is favorable, because less hours were actually used than forecasted

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