LVN Corporation's direct labor costs and related information for the month of June were as follows:

What is LVN Corporation's direct labor efficiency variance?

Question

LVN Corporation's direct labor costs and related information for the month of June were as follows:

What is LVN Corporation's direct labor efficiency variance?

Quizplus · Accepted Answer

C)
Labor rate variance = (Actual rate per hour - Standard rate per hour)× actual quantity
$650 = {(16,400 / 1,350)- rate per hour} × 1,350
Standard price (SP)= 15,750 / 1,350 = $11.67
Labor efficiency var = (Actual hours - Standard rate for actual units)× Standard rate
$1,750 = (1,350 - 1,200)× $11.67

LVN Corporation's Direct Labor Costs and Related Information for the Month