The Yoda Soda Company produces a product with a direct labor standard of 2.4 hou

Question

The Yoda Soda Company produces a product with a direct labor standard of 2.4 hours per unit at $8.00 per hour. During July 1,000 units were produced using 2,800 labor hours at an actual cost of $25,200. The direct labor efficiency variance for July was: A) $3,200 favorable. B) $3,200 unfavorable. C) $3,600 favorable. D) $3,600 unfavorable. 21. If the material quantity variance is favorable, the A) material price variance will be unfavorable. B) production manager has used materials efficiently. C) quantity purchased is less than the quantity used. D) actual price per unit is less than the standard price per unit.

Explanation / Answer

20.

Stadard Hours = 2.4 Hours x 1000 Units = 2400 Hours

Standard Labor Rate = $8 per Hour

Actual Hours = 2800 Hours

Actual Labor Rate = $9 Per Hour

Direct Labor Efficiency Variance = Standard Rate (Standard Time for actual output - Actual Time) = $8 (2400 - 2800) = $8(-400) = $3200 Unfavourable

21. If the Material Quantity variance is favourable, the

(C) Quantity purchased is less than the quantity used

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