Chhom Corporation makes a product whose direct labor standards are 0.4 hours per unit and $19.00 per hour. In November the company produced 1,800 units using 760 direct labor-hours. The actual direct labor cost was $13,300. The labor efficiency variance for November is:
A) $700 F
B) $760 F
C) $760 U
D) $700 U

Question

Quizplus · Accepted Answer

SH = 1,800 units × 0.4 hours per unit = 720 hours
Labor efficiency variance = (AH - SH) × SR
= (760 hours − 720 hours) × $19.00 per hour
= (40 hours) × $19.00 per hour
= $760 U

Chhom Corporation Makes a Product Whose Direct Labor Standards Are