Fact Pattern #1] The standard direct labor cost to produce 1 pound of output for

Question

Fact Pattern #1] The standard direct labor cost to produce 1 pound of output for Not Company is presented below. Related data regarding the planned and actual production activities for the current month for the company are also given below. (DLE Direct Labor Hours) DirectLabor Standard: 4DLH S12.00 per DLH Planned production Actual production Actual direct labor costs (6,250 DLH) 15,000 pounds 15,500 pounds $75,250 [2] ( Refers to Fact Pattern #1 ) Not Company's direct labor efficiency variance for the current month would be A. S600 unfavorable. B. S3,000 unfavorable. C. S602 unfavorable. D. S2,400 unfavorable.

Explanation / Answer

Direct Labour efficiency Variance = Standard Rate * (Actual Hours - Standard Hours) Direct Labour efficiency Variance = $12 * (6,250 - (0.4*15,500)) Direct Labour efficiency Variance = $600 U

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