Answer $672 favourable
Calculated as
Standard Hours = @ 2 pots per hour for 2000 pots = 1000 hour
Direct Manufacturing labor efficiency variance = AH X SR - SH X SR
= 972 X 24 - 1000 X 24
= 28*24
= $672 favourable
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The following data for a pottery company pertain to the production of 2,000 clay pots during...
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the current year:
Direct materials (2 kg of
plastic at $6 per kilogram)
$12.00
Direct labour (2 hours at $12
per hour)
24.00
Variable manufacturing
overhead
11.90
Fixed manufacturing
overhead
6.25
Total standard cost per
unit
$54.15
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Direct materials used
5,560
kg
Direct materials purchased
(6,780 kg)
$40,002
Direct labour (6,880 hours)
$67,424
Variable manufacturing
costs
$32,600
Fixed manufacturing costs
$17,600
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At the end of June the manager of the B.C. manufacturing plant
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Budget
Actual
Variance
Favourable (F)/
Unfavourable (U)
Production in units
332,000
347,000
15,000
F
Production costs:
Direct material
$996,000
$1,017,940
$(21,940)
U
Direct labour
1,411,000
1,442,700
(31,700)
U
Variable overhead costs
166,000
172,957
(6,957)
U
Fixed overhead costs
174,300
168,620
5,680
F
Total production costs
$2,747,300
$2,802,217
$(54,917)
U
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