The Company manufactures flowerpots. The following data relate to the standards for direct labor: Standard direct labor hours per pot 0.75 Standard direct labor rate per hour $16.25 The Company had the following actual results for April: Actual direct labor hours 4500 Actual total direct labor cost $71,000 Actual number of pots produced 8240 What is the direct labor efficiency variance for April? $36,400 favorable $36,400 unfavorable $27,300 favorable $27,300 unfavorable
The Company manufactures flowerpots. The following data relate to the standards for direct labor: Standard direct labor hours per pot 0.75 Standard direct labor rate per hour $16.25 The Company had the following actual results for April: Actual direct labor hours 4500 Actual total direct labor cost $71,000 Actual number of pots produced 8240 What is the direct labor efficiency variance for April? $36,400 favorable $36,400 unfavorable $27,300 favorable $27,300 unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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The Company manufactures flowerpots. The following data relate to the standards for direct labor: Standard direct labor hours per pot 0.75 Standard direct labor rate per hour $16.25 The Company had the following actual results for April: Actual direct labor hours 4500 Actual total direct labor cost $71,000 Actual number of pots produced 8240 What is the direct labor efficiency variance for April? $36,400 favorable $36,400 unfavorable $27,300 favorable $27,300 unfavorable
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