Majer Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per UnitDirect materials6.4ounces$ 3.00per ounce$ 19.20Direct labor0.4hours$ 13.00per hour$ 5.20Variable overhead0.4hours$ 5.00per hour$ 2.00 The company reported the following results concerning this product in February. Originally budgeted output4,800unitsActual output4,900unitsRaw materials used in production30,230ouncesActual direct labor-hours1,910hoursPurchases of raw materials32,600ouncesActual price of raw materials$ 2.90per ounceActual direct labor rate$ 12.40per hourActual variable overhead rate$ 4.90per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for February is: Multiple Choice A. $650 U B. $650 F C. $620 F D. $620 U

Labour efficiency variance measures the difference between the actual hours worked and the standard…

Answered: Majer Corporation makes a product with…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	6.4	ounces	$ 3.00	per ounce	$ 19.20
Direct labor	0.4	hours	$ 13.00	per hour	$ 5.20
Variable overhead	0.4	hours	$ 5.00	per hour	$ 2.00

The company reported the following results concerning this product in February.

Originally budgeted output	4,800	units
Actual output	4,900	units
Raw materials used in production	30,230	ounces
Actual direct labor-hours	1,910	hours
Purchases of raw materials	32,600	ounces
Actual price of raw materials	$ 2.90	per ounce
Actual direct labor rate	$ 12.40	per hour
Actual variable overhead rate	$ 4.90	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor efficiency variance for February is:

Multiple Choice

A. $650 U

B. $650 F

C. $620 F

D. $620 U

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions