When auto manufacturer BMW purchased the Rolls-Royce brand name,BMW had to hire and train a new staff of assembly workers.The new workers were paid $25 per hour,worked a total of 7,500 hours,and produced 2,000 cars.BMW budgeted for a standard labor rate of $27 per hour and 1.25 direct labor hours per car.What is the direct labor efficiency variance for the Rolls-Royce division?

Question

Quizplus · Accepted Answer

D)
Labor efficiency var = (Actual hours - Standard hours for act units)× Standard rate
$135,000 U= (7,500 - (2,000 units × 1.25 Standard hours))× $27

When Auto Manufacturer BMW Purchased the Rolls-Royce Brand Name,BMW Had