The following information relates to the direct labor at Padmaja Manufacturing, Inc. for March:
Actual | Standard | ||||||
Labor cost per hour | $ | 18.00 | $ | 17.50 | |||
Labor hours per unit produced | 1.5 | 1.4 | |||||
During March, Padmaja produced 2,100 units. What is Padmaja's labor efficiency variance for March?
rev: 11_21_2017_QC_CS-108941
Multiple Choice
$3,675 Unfavorable
$1,575 Favorable
$3,780 Unfavorable
$2,625 Unfavorable
Padmaja Manufacturing, Inc. | ||||
Answer) | Units Produced | 2100 | units | |
Actual direct labour hour | 3150 | Hours | ||
Actual Direct Labor Cost(3150*$18) | $ 56,700.00 | |||
Standard hours required to manufacture one unit | 1.4 | Hours | ||
Standard hours for actual output | 2940 | Hours | ||
Standard price per hour | $ 17.50 | per hour | ||
Standard rate | $ 51,450.00 | |||
The Direct Labor efficiency variance | ||||
(AH-SH)*SR=(3150-2940)*$17.5 | 3675 | (Unfavourable) | ||
Ans $3675 (Unfavourable) |
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