Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30−gallon heavy−duty plastic container. Budgeted quantity Budgeted price Direct materials 0.40 pounds $50 per pound Direct labor 0.50 hours $11 per hour During July, GII produced and sold 4,000 containers using 1,750 pounds of direct materials at an average cost per pound of $48 and 2,090 direct manufacturing labor hours at an average wage of $11.30 per hour. The direct manufacturing labor efficiency variance during July is ________.
Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30−gallon heavy−duty plastic container. Budgeted quantity Budgeted price Direct materials 0.40 pounds $50 per pound Direct labor 0.50 hours $11 per hour During July, GII produced and sold 4,000 containers using 1,750 pounds of direct materials at an average cost per pound of $48 and 2,090 direct manufacturing labor hours at an average wage of $11.30 per hour. The direct manufacturing labor efficiency variance during July is ________.
Chapter1: Financial Statements And Business Decisions
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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.
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Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the
30−gallon
heavy−duty
plastic container.|
|
Budgeted quantity
|
Budgeted price
|
|
|
Direct materials
|
0.40 pounds
|
$50 per pound
|
|
|
Direct labor
|
0.50 hours
|
$11 per hour
|
|
During July, GII produced and sold 4,000 containers using 1,750 pounds of direct materials at an average cost per pound of $48 and 2,090 direct manufacturing labor hours at an average wage of $11.30 per hour.
The direct manufacturing labor efficiency variance during July is ________.
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