Angela Airport Company manufactures one product with a standard direct manufacturing labor cost of four hours at P12.00 per hour. During June, 1,000 units were produced using 4,100 hours at P12.20 per hour. The unfavorable direct labor efficiency variance was: a. P 820.00 b. P 400.00 c. P 1,200.00 d. P 1,220.00
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
32 Angela Airport Company manufactures one product with a standard direct
hours at P12.00 per hour. During June, 1,000 units were produced using 4,100 hours at P12.20 per hour. The
unfavorable direct labor efficiency variance was:
a. P 820.00
b. P 400.00
c. P 1,200.00
d. P 1,220.00
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