Marlo Enterprises produces radon mitigation pumps. Information pertaining to the company’s monthly direct labor usage is provided below: Standard labor rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16 Standard hours allowed per radon mitigation pump . . . . . . . . . . . . . . . . . . . . . . . 0.5 hours Actual pumps produced during the current month . . . . . . . . . . . . . . . . . . . . . . . . 9,000 units Actual labor hours worked during the current month . . . . . . . . . . . . . . . . . . . . . . 3,600 hours Actual labor cost for the current month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,800 b. Compute the company’s labor efficiency variance.

Marlo Enterprises produces radon mitigation pumps. Information pertaining to the company’s monthly direct labor usage is provided below: Standard labor rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16 Standard hours allowed per radon mitigation pump . . . . . . . . . . . . . . . . . . . . . . . 0.5 hours Actual pumps produced during the current month . . . . . . . . . . . . . . . . . . . . . . . . 9,000 units Actual labor hours worked during the current month . . . . . . . . . . . . . . . . . . . . . . 3,600 hours Actual labor cost for the current month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,800 b. Compute the company’s labor efficiency variance.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Marlo Enterprises produces radon mitigation pumps. Information pertaining to the company’s

monthly direct labor usage is provided below:

Standard labor rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16

Standard hours allowed per radon mitigation pump . . . . . . . . . . . . . . . . . . . . . . . 0.5 hours

Actual pumps produced during the current month . . . . . . . . . . . . . . . . . . . . . . . . 9,000 units

Actual labor hours worked during the current month . . . . . . . . . . . . . . . . . . . . . . 3,600 hours

Actual labor cost for the current month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,800

b. Compute the company’s labor efficiency variance.

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