7) Bender Corporation produced 100 units of Product AA. The total standard and a

Question

7) Bender Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:

Materials: Standard Actual

Standard: 200 pounds at $3.00 per pound $600

Actual: 220 pounds at $2.85 per pound $627

Direct labor:

Standard: 400 hours at $15.00 per hour 6,000

Actual: 368 hours at $16.50 per hour 6,072

What is the labor efficiency variance for Bender Corporation?

A) $480 U

B) $552 F

C) $552 U

D) $480 F

8.

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

A) $17.50.

B) $20.00.

C) $22.50.

D) $25.00.

Hope you guys can show me the step of the answer, thanks for helping

Explanation / Answer

[Labor efficiency variance = (Actual hours worked × Standard rate) - (Standard hours allowed × Standard rate)] ie LEV = (368*$15) - (400*$15) = $(480) = $480F .................Ans (D) [Labor rate variance = (Actual hours worked × Actual rate) - (Actual hours worked × Standard rate)] LRV = 17500 = (7000*AR) - (7000*$20) So AR = (17500+7000*20)/7000 = $22.50 ..................Ans (C)

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