At Accustart, the standard quantity of labor is 22 hours per refrigeration unit. The standard wage rate is $34. In July, the company produced 86 refrigeration units and incurred 2,090 labor hours at a cost of $71,060. Calculate the labor rate variance and the labor efficiency variance. Indicate whether the variances are favorable or unfavorable.

At Accustart, the standard quantity of labor is 22 hours per refrigeration unit. The standard wage rate is $34. In July, the company produced 86 refrigeration units and incurred 2,090 labor hours at a cost of $71,060. Calculate the labor rate variance and the labor efficiency variance. Indicate whether the variances are favorable or unfavorable.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 9DQ: At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the...

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