Majer Corporation makes a product with the following standard costs Standard Qua

Question

Majer Corporation makes a product with the following standard costs Standard Quantity Standard Price or Standard Cost or Hours Rate 3.00per ounce5.20 5.00per hour Per Unit Direct materials Direct labor Variable overhead 19.20 0.4hours 0.4hours S 13.00per hour 2. The company reported the following results concerning this product in February Originally budgeted o Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate 4,800units 4,900units 1,910hours 2.90per ounce 4.90per hour 30,230ounces S 12.40per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. 37) The labor efficiency variance for February is: A) S620 U B) $650 U C) $620 F D) S650 F

Explanation / Answer

37. The labor efficiency variance for February. SH = 4,900 units × 0.4 hours per unit = 1,960 hours Labor efficiency variance = (AH - SH) × SR       = (1,910 hours ? 1,960 hours) × $13.00 per hour       = (50 hours) × $13.00 per hour       = $650 F Answer:D.$650F Answer:D.$650F

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