Arrow Industries employs a standard cost system in which direct materials invent

Question

Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.

     

    

During November, Arrow purchased 334,600 pounds of direct materials at a total cost of $671,300. The total factory wages for November were $85,100, 90% of which were for direct labor. Arrow manufactured 14,000 units of product during November using 320,300 pounds of direct materials and 3,730 direct labor hours.

  

Standard Quantity Standard
price Standard cost   Direct Materials 23 pounds $ 2.00 per pound $ 46.00   Direct Labor 0.25 hour $ 23.00 per hour $ 5.75 $   51.75  

Explanation / Answer

Direct labour efficiency variance = Std rate* (Std hours - Actual hours)

=23*(14000*0.25-3730)

=5290 Unfavorable

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.