Furson Corporation makes a single product.In a recent period 6,500 units were made and there was an unfavorable labor efficiency variance of $26,000.Direct labor workers were paid $8 per hour and total wages were $182,000.The labor rate variance was zero.The standard labor-hours per unit of output is closest to:
A)3.0
B)3.5
C)4.0
D)4.5

Question

Quizplus · Accepted Answer

AH = $182,000 F1F1F1S1F1F1F10 $8 per hour = 22,750 hours
Labor rate variance = AH(AR - SR)
$0 = 22,750 hours ($8 per hour - SR)
SR = $8 per hour
Labor efficiency variance = (AH - SH)SR
$26,000 = (22,750 hours - 6,500 units F1F1F1S1F1F1F10 Standard hours per unit)$8 per hour
(22,750 hours - 6,500 units F1F1F1S1F1F1F10 Standard hours per unit)= $26,000 F1F1F1S1F1F1F10 $8 per hour
(22,750 hours - 6,500 units F1F1F1S1F1F1F10 Standard hours per unit)= 3,250 hours
6,500 units F1F1F1S1F1F1F10 Standard hours per unit = 19,500 hours
Standard hours per unit = 19,500 hours F1F1F1S1F1F1F10 6,500 units
Standard hours per unit = 3 hours per unit

Furson Corporation Makes a Single Product