Gilder Corporation makes a product with the following standard costs: The compan

Question

Gilder Corporation makes a product with the following standard costs:
  

The company reported the following results concerning this product in June.
  

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:

Standard Quantity or
Hours Standard Price or
Rate Standard Cost Per
Unit Direct materials 7.6 grams $6.00 per gram $45.60 Direct labor 0.1 hours $16.00 per hour $1.60 Variable overhead 0.1 hours $6.00 per hour $0.60

Explanation / Answer

The labor efficiency variance for June is => (AH - SH) * SR

=>(510 - (5500 *0.1) * 16

=> (510 -550 ) * 16

The labor efficiency variance for June is => 640 F

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