QUESTION 23 Beakins Company produces a single product. The standard and actual c

Question

QUESTION 23 Beakins Company produces a single product. The standard and actual costs for the recent period follow: Standard Costs Direct materials (4 yards @ $5 per yard) Direct labor (1.5 hours @ $10 per hour) Variable Manufacturing overhead (1.5 hours $20 $15 $4 per hour) Actual Costs Direct materials purchased (6,000 yards) Direct materials used in production Direct labor cost incurred (2,100 hours) Variable manufacturing overhead cost incurred Units produced $28,500 5,000 yds $17, 850 $10,080 1,200 The company records are variances at the earliest possible point in time. Variable manufacturing overhead costs are applied to products on the basis of direct labor hours The labor efficiency variance for the period is: $3,000 U $2,550 U $2,550 F $3,000 F

Explanation / Answer

Labour efficiency variance = (Standard hour-actual hour)Standard rate

= (1200*1.5-2100)10

Labour efficiency variance = 3000 U

so answer is a) $3000 U

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