Heavy Products, Inc. developed standard costs for direct material and direct lab

Question

Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

                                                Budgeted quantity           Budgeted price

        Direct materials         0.90 pounds                        $60 per pound

        Direct labor                 0.10 hours                            $30 per hour

During June, Heavy Products produced and sold 19,000 containers using 1,200 pounds of direct materials at an average cost per pound of $63 and 17,100 direct manufacturing labor-hours at an average wage of $31.25 per hour.

The direct manufacturing labor efficiency variance during June is ________.

Explanation / Answer

direct manufacturing labor efficiency variance = SR[AH-SH]

                 = 30 [17100- (19000*.10)]

               = 30 [17100 - 1900]

                = 30 * 15200

              = 456000 U

**In my opinion there is a mistake in question as the difference cannot be such huge amount .so either actual hours are 1710 or standard hours per container is something else .

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