1. Mighty cereal, inc., uses a standard cost system or its crunchy pickled cereal. The direct labor standards for pickles are:
0.15 hours of labor time per box at $13.00 per hour.
During January, Mighty worked 8,000 hours of a total costs of $108,000 to produce 60,000 boxes of cereal.
What is mighty's direct labor rate variance?
a. $13,000 unfavorable
b. $13,000 favorable
c. $4,000 favorable
d. $4,000 unfavorable
2. what is mighty's direct labor efficiency variance?
a. $4,000 unfavorable
b. $13,000 unfavorable
c. $4,000 favorable
d. $13,000 favorable
The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.
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