Use the information below to answer the following question(s).
Tractor Corporation produces toy tractors. The company uses the following direct cost categories:

Actual performance for the company is shown below:
Actual output: 5,000 units
Direct Materials:

Direct Manufacturing Labour:

Direct Marketing Labour:

-What are the efficiency variances for direct manufacturing labour and direct marketing labour, respectively?
A) $25,000 favourable; $18,400 favourable
B) $23,750 favourable; $12,650 unfavourable
C) $25,000 unfavourable; $18,400 unfavourable
D) $23,750 unfavourable; $12,650 unfavourable
E) $23,750 favourable; $12,650 favourable

Question

Use the information below to answer the following question(s).
Tractor Corporation produces toy tractors. The company uses the following direct cost categories:
  
Actual performance for the company is shown below:
Actual output: 5,000 units
Direct Materials:
  
Direct Manufacturing Labour:
  
Direct Marketing Labour:
 
-What are the efficiency variances for direct manufacturing labour and direct marketing labour, respectively?
A) $25,000 favourable; $18,400 favourable 
B) $23,750 favourable; $12,650 unfavourable 
C) $25,000 unfavourable; $18,400 unfavourable 
D) $23,750 unfavourable; $12,650 unfavourable 
E) $23,750 favourable; $12,650 favourable

Quizplus · Accepted Answer

Mfg. Labour = [9,500 hours - (5,000 × 1.40 hours)] × $9.50 = $23,750 unfavourable
Mkt. Labour = [5,000 hours - (5,000 × 0.54 hours)] × $5.50 = $12,650 unfavourable

Use the Information Below to Answer the Following Question(s)