Wolery Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April:
The labor efficiency variance for the month is closest to:
A) $3,255 F
B) $3,255 U
C) $3,495 U
D) $3,495 F

Question

Wolery Inc. has provided the following data concerning one of the products in its standard cost system.  The company has reported the following actual results for the product for April:
 The labor efficiency variance for the month is closest to:
A) $3,255 F 
B) $3,255 U 
C) $3,495 U 
D) $3,495 F

Quizplus · Accepted Answer

SH = 8,800 units × 0.20 hours per unit = 1,760 hours
Labor efficiency variance = (AH × SR) - (SH × SR)
= (AH - SH) × SR
= (1,610 hours - 1,760 hours) × $21.70 per hour
= (-150 hours) × $21.70 per hour
= $3,255 F