Chrome File Edit View History Bookmarks People Window Help * Assignments. ACG 20

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Chrome File Edit View History Bookmarks People Window Help * Assignments. ACG 2071-CRN × y D Chapter Quiz 3 C D ezto.mheducation.com/hm.tpx 25. Hurren Corporation makes a product with the following standard costs Standard Quantity o Hours Standard Price or Standard Cost Rate Per Uni Direct materials Direct labor Variable overhead 0.7 hours 0.7 hours 10.00 per hou 5700 per hour $4.90 The company reported the following results concerning this product in June. 8,400 units 300 units Actual output Raw materials used in Actual direct labor-hours Purchases of raw materials Actual price Actual direct labor rate Actual variable overhead rate 28.290 500 hours 900 710 of raw materials hour $670 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchase varlance is computed when the materials are purchased The labor efficiency variance for June is:

Explanation / Answer

Standard data per unit:

Direct labor per unit = 0.7 hours

Actual output = 8300 units

Standard direct labor hours for actual output = 0.7*8300 = 5810 hours

Standard rate per hour = $10

Actual data:

Actual direct labor hours for 8300 units = 5500 hours

Labor efficiency variance:

Labr efficiency variance = Change in hours*Standard rate = (5810 - 5500)*10 = 310*10 =3100 favorable

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