Electric Zero produces relay units for generators. Each relay has a standard cost of $67. Standards call for two relays per generator. In July, the company purchased 120 relays for $7,560. The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process. The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23. In July, the company incurred 1,020 labor hours at a cost of $22,950. How much is the labor efficiency variance? A) $460 unfavorable B) $50 favorable C) $510 favorable D) $460 favorable

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
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Electric Zero produces relay units for generators. Each relay has a
standard cost of $67. Standards call for two relays per generator. In
July, the company purchased 120 relays for $7,560. The company used
104 relays in the production of 50 generators, with four relays damaged
in the installation process. The standard quantity of labor is 20 hours
per generator, with a standard wage rate of $23. In July, the company
incurred 1,020 labor hours at a cost of $22,950. How much is the labor
efficiency variance?
A) $460 unfavorable
B) $50 favorable
C) $510 favorable
D) $460 favorable
Transcribed Image Text:Electric Zero produces relay units for generators. Each relay has a standard cost of $67. Standards call for two relays per generator. In July, the company purchased 120 relays for $7,560. The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process. The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23. In July, the company incurred 1,020 labor hours at a cost of $22,950. How much is the labor efficiency variance? A) $460 unfavorable B) $50 favorable C) $510 favorable D) $460 favorable
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