Electric Zero produces relay units for generators.Each relay has a standard cost of $67.Standards call for two relays per generator.In July, the company purchased 120 relays for $7,560.The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process.The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23.In July, the company incurred 1,020 labor hours at a cost of $22,950.How much is the labor efficiency variance?
A)$460 unfavorable
B)$50 favorable
C)$510 favorable
D)$460 favorable

Question

Quizplus · Accepted Answer

Explanation:Standard labor cost = 50 generators * 20 hours/generator * $23/hour = $23,000Actual labor cost = $22,950Labor efficiency variance = $23,000 - $22,950 = $460 favorable

Electric Zero Produces Relay Units for Generators