Exhibit 10-3
Glenbrook Inc.has the following standard costs the one product the company produces.
Direct Materials (2 pounds at $18.00 per pound)= $36.00 per unit
Direct Labor (0.6 hours at $48.00 per hour)= $28.80 per unit
During March,Glenbrook produced 2,000 units,bought and used 4,200 pounds of direct materials at $19.20 per pound,and used 1,100 hours of labor at a total cost of $56,100.
-Refer to Exhibit 10-3.Based on this information,what is the direct labor efficiency variance?
A)$4,800 favorable
B)$4,800 unfavorable
C)$5,100 unfavorable
D)$5,100 favorable
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The direct labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard hours for 2,000 units = 2,000 x 0.6 = 1,200 hours. Actual hours = 1,100. Standard rate = $48. Efficiency variance = (1,100 - 1,200) x $48 = -100 x $48 = $4,800 favorable.

Exhibit 10-3 Glenbrook Inc.has the Following Standard Costs the One Product the Product