Tharaldson Corporation makes a product with the following standard costs: Standa

Question

Tharaldson Corporation makes a product with the following standard costs: Standard Standard Quantity or Standard Price or Cost Per Unit Hours 5.3 ounces 0.2 hours 0.2 hours Rate Direct materials Direct labor Variable overhead $14.00 per hour $ 4.00 per hour $ 2.00 per ounce $10.60 $ 2.80 $.80 The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost 4,300 units 4,100 units 20,900 ounces 22,000 ounces 570 hours $ 39,400 $ 14,300 $ 4,150

Explanation / Answer

Labor efficiency variance = 14*(570-4100*0.2)= 3500 F

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