Question

Tout Corporation makes a product that has the following direct labor standards: Standard direct labor-hours 0.1...

Tout Corporation makes a product that has the following direct labor standards:

Standard direct labor-hours 0.1 hours per unit
Standard direct labor rate $22.00 per hour
Standard cost $2.20 per unit


The company budgeted for production of 6,400 units in October, but actual production was 6,500 units. The company used 610 direct labor-hours to produce this output. The actual direct labor rate was $21.80 per hour.

The labor efficiency variance for October is:

$880 F

$872 F

$880 U

$872 U

Homework Answers

Answer #2
  • Correct Answer = Option #1: $ 880 F

Labour Efficiency Variance

(

Standard Hours = 6500 actual units x 0.1 std hrs per unit

-

Actual Hours

)

x

Standard Rate

(

650

-

610

)

x

$                        22.00

880

Variance

$                  880.00

Favourable-F

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