Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $27,000 favorable; direct labor efficiency variance = $55,000 unfavorable. Sheldon allows 4 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 20% more direct labor hours than the standard allowed for the output achieved.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $27,000 favorable; direct labor efficiency variance = $55,000 unfavorable. Sheldon allows 4 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 20% more direct labor hours than the standard allowed for the output achieved.

 

What was the direct labor flexible-budget (FB) variance for the month?

 

Multiple Choice
  •  
    $28,000 unfavorable.
  •  
    $33,600 unfavorable.
  •  
    $32,400 favorable.
  •  
    $66,000 unfavorable.
  •  
    $82,000 unfavorable.
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