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25 July, 22:30

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 10 hours Standard labor rate $ 13.80 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,800 hours Actual total labor cost $ 104,520 Actual output 1,050 units What is the labor efficiency variance for the month?

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  1. 25 July, 23:19
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    Actual Hours = 3,800 Hours

    Standard Hours = 500 * 8.7

    = 4,350 Hours

    Standard Rate = $18.10

    Labor Efficiency Variance = (Actual hours - Standard hours) * Standard rate

    = (3,800 - 4,350) * $18.10

    = $9,955 Favorable
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