Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, aII estimated...

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Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, aII estimated...

Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, aII estimated the following standard costs for one of their major products, the 10−gallon
plastic container.

	Budgeted Quantity	Budgeted Price
Direct materials	0.3 pounds	$80 per pound
Direct labor	0.2 hours	$10 per hour

During June, Heavy Products produced and sold 15,000 containers using 2,400 pounds of direct materials at an average cost per pound of $82 and 3,000 direct manufacturing labor−hours at an average wage of $81.25 per hour.

The direct manufacturing labor efficiency variance during June is____.

A. $48,750 unfavorable
B. $1,068,750 unfavorable
C. $0
D. $213,750 favorable

business accounting

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Answer 1

Answer #1

Correct answer-----------(C) $0

Working

The actual and standard labor hours are same hence there is no efficiency variance.

Standard DATA for		15000	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct labor	( 0.2 Hour x 15000 Units)=3000 Hour	$ 10.00	$ 30,000.00

.

Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3000	-	3000	)	x	$ 10.00
	0
	Variance		$ -			Favourable-F

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Answer 2

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