Harris Manufacturing produces white sauce.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system for 2017: $\begin{array}{|l|l||l|l|}
\hline {\text { Budgeted and Standard Data }} & &\text { Actual Data } \
\hline \text { Material } & \begin{array}{l}
1 / 4 \mathrm{lb} . @ \$ 14 \text { per } \
\text { pound }
\end{array} & \text { Froduced } & 6,200 \text { units } \\hline \text { Labor } & \begin{array}{l}
1.4 \mathrm{hrs} \text { hour } @ \$ 16 \text { per } \
\text { hour }
\end{array} & \begin{array}{l}
\text { Materials } \
\text { purchased }
\end{array} & \begin{array}{l}
1,600 \mathrm{lbs} \text { for } \$ 13.70 / \
\text { pound }
\end{array} \\hline \text { Total fixed overhead } & \$ 84,000 & \text { Materials used } & 1,520 \mathrm{lbs} . \
\hline \text { Variable overhead } & \$ 6.50 \text { per unit } & \text { Labor worked } & 8,740 \mathrm{hrs} \text {. at } \$ 15.90 \text { /hour } \
\hline \text { Production } & 6,000 \text { units } & \text { Total overhead } & \$ 122,000 \
\hline
\end{array}$ How much the direct labor efficiency variance for 2017?

Question

Quizplus · Accepted Answer

The direct labor efficiency variance is calculated as the difference between the actual hours worked and the standard hours allowed for the actual production, multiplied by the standard rate per hour. The standard hours allowed for the actual production (6,200 units) is 6,200 units * 1.4 hours/unit = 8,680 hours. The actual hours worked are 8,740 hours. The difference is 8,740 - 8,680 = 60 hours. The standard rate per hour is $16. Therefore, the direct labor efficiency variance is 60 hours * $16/hour = $960 unfavorable.

Harris Manufacturing Produces White Sauce How Much the Direct Labor Efficiency Variance for 2017? A)$874

Harris Manufacturing Produces White Sauce How Much the Direct Labor Efficiency Variance for 2017?
A)$874