Marv Company's direct labor costs for manufacturing its only product were as follows for October: Standard direct labor hours (DLHs) per unit of product 2 Budgeted finished units for the period 7,100 Actual number of finished units produced 5,700 Standard wage rate per direct labor hour (SP) $ 20.00 Direct labor costs incurred $ 234,000 Actual wage rate per direct labor hour (AP) $ 18.00 The direct labor efficiency variance for October, rounded to the nearest dollar, was:

a. $32,000 unfavorable.

b. $20,600 favorable.

c. $26,000 favorable.

d. $3,200 unfavorable.

e. $52,600 unfavorable.

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8 October, 15:37

Marv Company's direct labor costs for manufacturing its only product were as follows for October: Standard direct labor hours (DLHs) per unit of product 2 Budgeted finished units for the period 7,100 Actual number of finished units produced 5,700 Standard wage rate per direct labor hour (SP) $ 20.00 Direct labor costs incurred $ 234,000 Actual wage rate per direct labor hour (AP) $ 18.00 The direct labor efficiency variance for October, rounded to the nearest dollar, was:

a. $32,000 unfavorable.

b. $20,600 favorable.

c. $26,000 favorable.

d. $3,200 unfavorable.

e. $52,600 unfavorable.

+3

Answers (1)

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Xavier Jenkins · Answer 1

a. $32,000 unfavorable

Explanation:

The computation of the direct labor efficiency variance for October is shown below:-

Direct labor efficiency variance = (Standard hours for actual production - Actual hrs) * Standard rate per hour

= (5,700 * 2 - $234,000 : $18.00) * $20

= (11,400 - $13,000) * $20

= $1,600 * $20

= $32,000 unfavorable

Therefore for computing the direct labor efficiency variance for October we simply applied the above formula.