Your Company uses a standard cost system. The labor standard is 10 units per 8-hour day...

Your Company uses a standard cost system. The labor standard is 10 units per 8-hour day at a standard cost of $15 per hour. Last month employees worked 1,920 hours and produced 2,500 units. The total labor cost during this period was $29,184. What was the labor efficiency (Q) variance for this last pay period?

		$816 Unfavorable
		$816 Favorable
		$1,200 Unfavorable
		$1,200 Favorable

Solutions

Expert Solution

Correct Option D i.e. $1,200 Favorable


	Budgeted	Standard	Actual
	Quantity/Hrs	Rate	Amount	Quantity/Hrs	Rate	Amount	Quantity/Hrs	Rate	Amount

Labour	0.8	15	12	2000	15	30000	1920	15.2	29184



Labour Efficiency Variance = (Standard Hrs. - Actual Hrs) Standard Rate
= (2000 - 1920 )*15
1,200	Favorable

ekkarill92 answered 1 year ago

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