Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

During June, Heavy Products produced and sold 15,000 containers using 2,400 pounds of direct materials at an average cost per pound of $92 and 3,750 direct manufacturing labor-hours at an average wage of $91.25 per hour.
The direct manufacturing labor efficiency variance during June is ________.
A) $85,547 unfavorable
B) $229,687.5 favorable
C) $918,750 unfavorable
D) $0

Question

Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

During June, Heavy Products produced and sold 15,000 containers using 2,400 pounds of direct materials at an average cost per pound of $92 and 3,750 direct manufacturing labor-hours at an average wage of $91.25 per hour.
The direct manufacturing labor efficiency variance during June is ________.
A) $85,547 unfavorable 
B) $229,687.5 favorable 
C) $918,750 unfavorable 
D) $0

Quizplus · Accepted Answer

Direct manufacturing labor efficiency variance = [3,750 dlh - (15,000 × 0.25)] × $30 = $0