Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.
The company has reported the following actual results for the product for April:

-The labor efficiency variance is:
A) $4,000 F
B) $4,125 F
C) $4,125 U
D) $4,000 U

Question

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.
  The company has reported the following actual results for the product for April:
 
-The labor efficiency variance is:
A) $4,000 F 
B) $4,125 F 
C) $4,125 U 
D) $4,000 U

Quizplus · Accepted Answer

SH = 1,000 units × 2.00 hours per unit = 2,000 hours
Labor efficiency variance = (AH − SH) × SR
= (2,500 hours − 2,000 hours) × $8.00 per hour
= (500 hours) × $8.00 per hour
= $4,000 U