Solar Tech Inc. makes a product that requires 0.5 hours per unit at a standard labor rate of $28 per hour. In June, the company produced 6,800 units and used 3,600 labor hours. Actual labor cost was $100,800. What is the labor efficiency variance for June?

Solar Tech Inc. makes a product that requires 0.5 hours per unit at a standard labor rate of $28 per hour. In June, the company produced 6,800 units and used 3,600 labor hours. Actual labor cost was $100,800. What is the labor efficiency variance for June?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 7PB: Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid...

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Question

Can you explain the correct methodology to solve this general accounting problem?

Solar Tech Inc. makes a product that requires 0.5 hours per unit at a
standard labor rate of $28 per hour. In June, the company produced 6,800
units and used 3,600 labor hours. Actual labor cost was $100,800.
What is the labor efficiency variance for June?

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