The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month:
What is the labor efficiency variance for the month?
A) $8,910 U
B) $12,555 F
C) $12,555 U
D) $8,640 U

Question

The following labor standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:
 What is the labor efficiency variance for the month?
A) $8,910 U 
B) $12,555 F 
C) $12,555 U 
D) $8,640 U

Quizplus · Accepted Answer

SH = 1,000 units × 8.1 hours per unit = 8,100 hours
Labor efficiency variance = (AH − SH) × SR
= (8,700 hours − 8,100 hours) × $14.40 per hour
= (600 hours) × $14.40 per hour
= $8,640 U

The Following Labor Standards Have Been Established for a Particular