The Lennon Company uses a standard costing system and a flexible budget.At a normal level of activity of 15,000 units and 45,000 standard direct labor hours,the standard direct labor cost would be $270,000.During June,44,050 hours were worked to produce 14,000 units at an actual direct labor cost of $352,000.The direct labor efficiency variance in June was

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The direct labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. The standard rate is $270,000 / 45,000 hours = $6 per hour. Standard hours for 14,000 units = (14,000 / 15,000) x 45,000 = 42,000 hours. Efficiency variance = (44,050 - 42,000) x $6 = $12,300 (U).

The Lennon Company Uses a Standard Costing System and a Flexible