Madrid Co. has a direct labor standard of 4 hours per unit of output. Each employee...

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Madrid Co. has a direct labor standard of 4 hours per unit of output. Each employee has a standard wage rate of $12.00 per ho

Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $23.50 per hour.

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Answer 1

Answer #1

Ans : $5760 favorable

Direct labor Efficiency Variance :-
Direct labor Efficiency Variance	=	Standard Rate	× (	Actual labor hours	-	Standard labor hours	)
	=	12.00	× (	9240	-	2430*4	)
	=	12.00	× (	9240	-	9720	)
	=	12.00	×	-480
	=	-$5,760		Favorable


Ans : $13630 favorable

Direct labor Efficiency Variance :-
Direct labor Efficiency Variance	=	Standard Rate	× (	Actual labor hours	-	Standard labor hours	)
	=	23.50	× (	8960	-	4770*2	)
	=	23.50	× (	8960	-	9540	)
	=	23.50	×	-580
	=	-$13,630		Favorable

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