Landram Corporation makes a product with the following standard costs: In March

Question

Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for March is: A) $2,660 F B) $2,422 F C) $2,422 U D) $2,660 U

Explanation / Answer

Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for March is

: A) $2,660 F

B) $2,422 F

C) $2,422 U

D) $2,660 U

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