Question

Marv Company's direct labor costs for manufacturing its only product were as follows for October: Standard direct labor hours (DLHs) per unit of product 2 Budgeted finished units for the period 7,300 Actual number of finished units produced 5,800 Standard wage rate per direct labor hour (SP) $ 22.00 Direct labor costs incurred $ 260,000 Actual wage rate per direct labor hour (AP) $ 20.00 The direct labor efficiency variance for October, rounded to the nearest dollar, was:

Answer 1

Standard DATA for		5800	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct labor	( 2hr x 5800 Units)=11600 hr	$   22.00	$   255,200.00

Actual DATA for		5800	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct labor	13000	$     20.00	$        260,000.00

Direct Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	11600	-	13000	)	x	$ 22.00
	-30800
	Variance		$ 30,800			Unfavourable-U

Direct labor efficiency Variance = $30,800 Unfavorable