The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

• Actual cost of direct material purchased and used: $65,560
• Material price variance: $5,960 unfavorable
• Total materials variance: $22,360 unfavorable
• Standard cost per pound of material: $4
• Standard cost per direct labor-hour: $5
• Actual direct labor-hours: 6,500 hours
• Labor efficiency variance: $3,500 favorable
• Standard number of direct labor-hours per unit of Roff: 2 hours
• Total labor variance: $400 unfavorable

-The total number of units of Roff produced during August was:
A)10,800
B)14,400
C)3,600
D)6,500

Question

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

• Actual cost of direct material purchased and used: $65,560
• Material price variance: $5,960 unfavorable
• Total materials variance: $22,360 unfavorable
• Standard cost per pound of material: $4
• Standard cost per direct labor-hour: $5
• Actual direct labor-hours: 6,500 hours
• Labor efficiency variance: $3,500 favorable
• Standard number of direct labor-hours per unit of Roff: 2 hours
• Total labor variance: $400 unfavorable

-The total number of units of Roff produced during August was:
A)10,800
B)14,400
C)3,600
D)6,500

Quizplus · Accepted Answer

Labor efficiency variance = (AH F1F1F1S1F1F1F10 SR)- (SH F1F1F1S1F1F1F10 SR)
= (6,500 hours F1F1F1S1F1F1F10 $5 per hour)- (2 hours per unit F1F1F1S1F1F1F10 Actual units produced F1F1F1S1F1F1F10 $5 per hour)= -$3,500
$32,500 - $10 per unit F1F1F1S1F1F1F10 Actual units produced = -$3,500
$10 per unit F1F1F1S1F1F1F10 Actual units produced = $36,000
Actual units produced = $36,000 F1F1F1S1F1F1F10 $10 per unit = 3,600 units

The Geurtz Company Uses Standard Costing