Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce

Question

Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor efficiency variance for August? A. $10,376 unfavorable. B. $2,104 unfavorable. C. $2,104 favorable. D. $12,480 unfavorable. E. $12,480 favorable.

Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.

Gross profit for the White and Grey Divisions is: A. A Above. B. B Above. C. C Above. D. D Above. E. E Above.

Explanation / Answer

d. $12,480 unfavorable. The efficiency variance is calculated as: (Actual Hours - Standard Hours) X Standard Rate Here it would be: (21,040 - 20,000) X $12 = $12,480 UNFAVORABLE The Price variance is calculated as: (Actual Cost per hour - Standard Cost per hour) X Actual # of hours Here is would be: ($11.90 - $12.00) X 21,040 = $2,104 FAVORABLE The total variance is therefore: $12,480 - $2,104 = $10,376 UNFAVORABLE

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