A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5 per pound. Standard labor was budgeted at 0.5 hour per widget at $15 per hour. The actual usage in the current year was 25,000 pounds (at an actual cost of $4.75 per pound) and 3,000 hours (at an actual rate of $17 per hour) to produce 10,000 widgets. What was the direct labor efficiency (usage) variance?
A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5 per pound. Standard labor was budgeted at 0.5 hour per widget at $15 per hour. The actual usage in the current year was 25,000 pounds (at an actual cost of $4.75 per pound) and 3,000 hours (at an actual rate of $17 per hour) to produce 10,000 widgets. What was the direct labor efficiency (usage) variance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5 per pound. Standard labor was budgeted at 0.5 hour per widget at $15 per hour. The actual usage in the current year was 25,000 pounds (at an actual cost of $4.75 per pound) and 3,000 hours (at an actual rate of $17 per hour) to produce 10,000 widgets. What was the direct labor efficiency (usage) variance?
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