Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 8 - Flexible Budgets, Overhead Cost Variances, and Management Control - Assignment Material - Exercises - Page 319: 8-25(1)

Answer

Direct Labor Efficiency Variance: \$2,240 U (Unfavorable)

Work Step by Step

Direct Labor Efficiency Variance: Direct Labor Efficiency Variance = (Actual Hours Worked - Standard Hours for Actual Output) * Standard Rate Direct Labor Efficiency Variance = (10,140 hours - 10,000 hours) * \$16 per hour Direct Labor Efficiency Variance = 140 hours * \$16 = \$2,240 U (Unfavorable)
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