Gilder Corporation makes a product with the following standard costs: Standard Q

Question

Gilder Corporation makes a product with the following standard costs: Standard Quantity or Standard Price or Rate Standard Cost Per Unit Direct materlals Direct labor Varlable overhead Hours 8.00 grams 0.20 hours 0.20 hours $11.00 per gram $29.00 per hour $ 9.00 per hour $88.00 $5.80 $1.80 The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchases of raw materlals Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual varlable overhead cost 4,900 units 5,160 units 39,400 grams 43,800 grams 890 hours $451,140 $25,009 $5,680 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 June is: O $4,118 F O $4,090 U O $4,090 F

Explanation / Answer

Labor efficiency variance = 29*(890-5160*0.2)= $4118 F

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