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25 May, 08:17

Trendy T's Corporation manufactures t - shirts, which is its only product. The standards for t - shirts are as follows: Standard direct labor cost per hour Standard direct labor hours per t-shirt $19.00 0.4 During the month of January, the company produced 1,400 t - shirts. Related production data for the month follows: Actual direct labor hours Actual direct labor cost incurred 680 $10,880 What is the direct labor eficiency variance for the month? O A. $2,040 unfavorable B. $2,040 favorable O C. $2,280 favorable O D. $2,280 unfavorable

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  1. 25 May, 09:29
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    Option (D) is correct.

    Explanation:

    Given that,

    Standard direct labor cost per hour, SR = $19 per hour

    Standard direct labor hours per t-shirt = 0.4 hours

    Actual direct labor hours, AH = 680

    Actual output = 1,400 t-shirts

    Standard hours for actual output, SH:

    = Standard direct labor hours per t-shirt * T-shirts produced

    = 0.4 hours * 1,400

    = 560

    Therefore,

    Direct labor efficiency variance for the month:

    = (SH - AH) * SR

    = (560 - 680) * $19

    = $2,280 Unfavorable
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