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The Alperti Company manufactures surgical gowns for hospitals. Their controller, Ethell Hieken is preparing the variance analysis report for October. Standard Costs are as follows: Direct Material 2.0 yards at $6 per yard
Direct Labor 0.25 hours at $12 per hour
During October, Ms Hieken's report shows:
100,000 gowns produced
175,000 yards of fabric purchased at a cost of $1,137,500
185,000 yards of fabric used
Employees worked 24,000 hours at a cost of $276,000
-The direct labor efficiency variance is
A) $12,000 favorable
B) $12,000 unfavorable
C) $36,000 favorable
D) $36,000 unfavorable

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Quizplus · Accepted Answer

The direct labor efficiency variance is favorable because the actual hours worked were less than the standard hours allowed.

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