Dreary Credit Agency uses a standard cost system for the processing of its credi

Question

Dreary Credit Agency uses a standard cost system for the processing of its credit applications. The labor standard at Dreary is 10 applications per 8 hour day at a standard cost of SI 5 per hour. During the last pay period. Dreary's credit agents worked 1,920 hours and processed 2,500 applications. The total labor cost for the agents during this period was $29,184. What was Dreary's labor efficiency variance for this last pay perio d$384 Unfavorabl S816 Favorable $1, 200 Favorable $1,500 Favorable

Explanation / Answer

Labour Efficiency Variance = ( Standard Hours- Actual Hours) Standard Rate per Hour (250*8-1920)15 (2000-1920)*15 Labour Efficiency Variance = 1200 F The correct option is C. $ 1200 favourable

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