Question

ove & cxnt Fluegge Inc. has provided the following data concerning one of the products in its standard cost system. Varlable manufacturing overhead is applied to products on the basis of direct labor-hourss Standard Quantity or Hours per Unit of Output 5.7 liters Inputs Direct materials Direct labor Variable manufacturing overhead -1 Standard Price or Rate $ 5.40 per liter e.70 hours $20.60 per hour $ 5.se per hour e.70 hours The company has reported the following actual results for the product for December Actual output Raw materials purchased Actual price of raw materials Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor rate Actual direct labor cost Actual variable overhead rate Actual variable overhead cost 4,1ee units 25,100 1iters 4.80 per liter $120,480 23,360 1iters $ 2,7ee hours $ 21.20 per hour $ 57,240 5.90 per hour $ 15,930 $ The labor efficiency varlance for the month is closest to:

$3604 U

$3604 F

$3502 F

$3502 U

Answer 1

OPTION: = $3502 F

EXPLANATION:

Labor efficiency variance = standard rate x (standard hours - actual hours)

= $20.60 x (2870 - 2700)

= $3502 Favorable

Where,

Standard hours = actual output x standard hours per unit of output

= 4100 x 0.70 = 2870 hours