Mohammed Company employs a standard cost system. Mohammed has established the following standards for one unit of product: Standard Quantity Standard Price Standard Cost Direct materials 12.0 pounds $ 7.00/pound $ 84.00 Direct labor 2.0 hours $15.00/hour 75.00
Mohammed Company employs a
|
|
Standard Quantity |
Standard Price |
Standard Cost |
|
Direct materials |
12.0 pounds |
$ 7.00/pound |
$ 84.00 |
|
Direct labor |
2.0 hours |
$15.00/hour |
75.00 |
During June, Mohammed planned to produce 21,000 units of product. It purchased 330,000 pounds of direct material at a total cost of $2,343,000. The total factory wages for June were $1,440,000. Mohammed manufactured 20,000 units of product during June using 302,000 pounds of direct material and 41,000 direct labor hours. How much is the labor efficiency variance?
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$15,000 unfavorable |
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$75,000 unfavorable |
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$75,000 favorable |
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$15,000 favorable |
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|
$35,000 favorable |
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