Berends Corporation makes a product with the following standard costs: The compa

Question

Berends Corporation makes a product with the following standard costs:

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

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 April is:

Question options:

$1,232 F

$1,360 F

$1,360 U

$1,232 U

Standard Quantity or Hours Standard Price or Rate Direct materials 9.2 pounds $3.00 per pound Direct labor 0.3 hours $17.00 per hour Variable overhead 0.3 hours $3.00 per hour

Explanation / Answer

Direct Labor Effciency Variance: Standard Rate(Actual Hours-Standard Hours) 17*(2560-2640) -1360 negative indicated it is favorable as actual hours is less than standard hous allowed Ans $1360 F Actual hours 2560 hours Standard Hours for actual output 8800*.3 hours 2640 hours Standard Rate $17 per hours

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