Mom\'s Apple Pie Company uses a standard cost system. The standard direct labor

Question

Mom's Apple Pie Company uses a standard cost system. The standard direct labor time for each pie is 20 minutes. During the most recent month, the company produced and sold 5,100 pies. The standard direct labor rate is $12 per hour; the actual labor rate per hour for the month was $12.80. The company used a total of 1,680 labor-hours. value: 0.75 points What was the direct labor efficiency (usage) variance for the month? (Do not round intermediate calculations.) Direct labor efficiency (usage) variance

Explanation / Answer

Actual Time = 1680/5100 = 0.32941 per hour x 5100 pies = 1680

Standard Time = 0.33333 per hour x 5100 = 1700

Actual Rate = $12.80 per hour

Standard Time = $12 per hour

Direct Labour Efficiency Varience = Standered Cost Of Actual Hours - Standered Cost

=( Actual Time x Standered Rate) - (Standered Hour x Standered Rate)

= ( 1680 x $12) - (1700 x $12)

= 20160 - 20400

= (240) unfavorable

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