he following information applies to the questions displayed below. ] Assume that

Question

he following information applies to the questions displayed below.]

Assume that the company computes variances at the earliest point in time. The direct-labor efficiency variance is:

Assume that the company computes variances at the earliest point in time. The standard hours allowed for the work performed are:

  Cost standards for one unit of product no. C77:      Direct material 3 pounds at $2.80 per pound $8.40      Direct labor 6 hours at $7.40 per hour 44.40   Actual results:      Units produced 6,600 units      Direct material purchased 26,200 pounds at $3.00 $78,600      Direct material used 19,500 pounds at $3.00 58,500      Direct labor 40,700 hours at $7.20 293,040

Explanation / Answer

Direct-labor efficiency variance = SR[AH-SH]

               = 7.4 [40700 -(6600 * 6)]

                   7.4 [40700- 39600]

                     8140 U

standard hours allowed for the work performed =Actual units *Standard hours per unit

         = 6600 * 6

          = 39600 hours

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