Meridian Manufacturing has set labor costs at $60 per unit of output, based on 4 hours allowed to produce each finished unit. Last month, 5,200 direct labor hours were used, and 1,800 units of output were manufactured at a total labor cost of $130,000. a. Determine the labor rate variance. b. Determine the labor efficiency variance.

Meridian Manufacturing has set labor costs at $60 per unit of output, based on 4 hours allowed to produce each finished unit. Last month, 5,200 direct labor hours were used, and 1,800 units of output were manufactured at a total labor cost of $130,000. a. Determine the labor rate variance. b. Determine the labor efficiency variance.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...

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