The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.7 hours Standard labor rate $ 13.50 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,500 hours Actual total labor cost $ 98,250 Actual output 900 units What is the labor efficiency variance for the month?

Question

Business

Allison Fritz

23 May, 02:45

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.7 hours Standard labor rate $ 13.50 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,500 hours Actual total labor cost $ 98,250 Actual output 900 units What is the labor efficiency variance for the month?

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Brown Sugar · Answer 1

favorable 16,605

Explanation:

production 900 units

standard 9.7 hours per unit at $13.5

900 x 9.7hours per unit = 8,730

Actual hours 7,500

labor cost $98,250

actual rate 1$3.1

labour efficiency variance

standard rate (standard hours - acual hours)

13.5 (8,730 - 7,500) = 16,605