Davidson Corporation makes a product that has the following direct labor standards:
In September the company produced 4,900 units using 2,210 direct labor-hours. The actual direct labor rate was $22.40 per hour.

-The labor efficiency variance for September is:
A)$5,520 F
B)$5,376 F
C)$5,520 U
D)$5,376 U

Question

Davidson Corporation makes a product that has the following direct labor standards:
  In September the company produced 4,900 units using 2,210 direct labor-hours. The actual direct labor rate was $22.40 per hour.

-The labor efficiency variance for September is:
A)$5,520 F 
B)$5,376 F 
C)$5,520 U 
D)$5,376 U

Quizplus · Accepted Answer

SH = 4,900 units F1F1F1S1F1F1F10 0.5 hours per unit = 2,450 hours
Labor efficiency variance = (AH - SH)SR
= (2,210 hours - 2,450 hours)$23.00 per hour
= (-240 hours)$23.00 per hour = $5,520 F

Davidson Corporation Makes a Product That Has the Following Direct