Dibert 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 February:
The labor efficiency variance for the month is closest to:
A) $3,876 U
B) $4,199 F
C) $4,199 U
D) $3,876 F

Question

Dibert 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 February:
 The labor efficiency variance for the month is closest to:
A) $3,876 U 
B) $4,199 F 
C) $4,199 U 
D) $3,876 F

Quizplus · Accepted Answer

SH = 5,100 units × 0.70 hours per unit = 3,570 hours
Labor efficiency variance = (AH × SR) - (SH × SR)
= (AH - SH) × SR
= (3,380 hours - 3,570 hours) × $20.40 per hour
= (-190 hours) × $20.40 per hour
= $3,876 F