Question

Are You Playing to Win?, LLC, a manufacturer of motivational wall art uses standard

costing for the single product the company makes and sells. The following data are

for the month of October:

Standard Cost per DL

hour

$8

Actual DL hours logged

3,800

Labor Efficiency Variance

$1,600 F

DL input ratio

2 hours per unit

Total Labor Variance

$680 U

The total number of units produced during October was?

Why do we use DL variance to find out total number of units produced that DM Variance?

Answer 1

Labor efficiency variance =			(Standard Hours - Actual Hours) x Standard Rate
	$ 1,600.00	=	(SH - 3800) x $ 8
	$    200.00	=	SH - 3800
	SH	=	4000	hours

DL input ratio =		2 hours per unit
Actual Units =		4000 hrs / 2 hrs
	=	2000	units