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Cost standards for one unit of product no. C77: | |
Direct material 3 pounds at $2.80 per pound | $8.40 |
Direct labor 6 hours at $7.40 per hour | 44.40 |
Actual results: | |
Units produced 6,600 units | |
Direct material purchased 26,200 pounds at $3.00 | $78,600 |
Direct material used 19,500 pounds at $3.00 | 58,500 |
Direct labor 40,700 hours at $7.20 |
293,040 |
Assume that the company computes variances at the earliest point in time. The direct-labor efficiency variance is:
Assume that the company computes variances at the earliest point in time. The standard hours allowed for the work performed are:
Direct-labor efficiency variance = SR[AH-SH]
= 7.4 [40700 -(6600 * 6)]
7.4 [40700- 39600]
8140 U
standard hours allowed for the work performed =Actual units *Standard hours per unit
= 6600 * 6
= 39600 hours
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