Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the following standard costs for one of their most popular products.
Budgeted quantity |
Budgeted price |
||
Direct materials |
77 pounds |
$ 8.60$8.60 per pound |
|
Direct labor |
0.40.4 hours |
$ 11$11 per hour |
During September, MCP produced and sold
1,000 units using 7,400 pounds of direct materials at an average cost per pound of $8 and 370 direct labor hours at an average wage of $11.30 per hour.
The direct labor efficiency variance during September is ________.
A.
$ 219$219
unfavorable
B.
$ 339$339
unfavorable
C.
$ 330$330
favorable
D.
$ 120$120
favorable
Table showing the calculation of variance
budgeted Direct labor (per unit) | 0.4 |
units | 1000 |
budgeted total Direct labor (hrs) | 400 |
actual hours | 370 |
standard rate | $11 |
direct labor efficiency variance | $330 |
direct labor efficiency rate = (Budgeted hours - Actual hours) x Standard rate
= ( 400 - 370) x $11
=$330
Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017,...
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