Bortello Corporation produces high-quality leather boots.The company has a standard cost system and has set the following standards for materials and labor:

During the year Bortello produced 125 boots.Actual leather purchased was 1,700 strips, at $16 per strip.There were no beginning or ending inventories of leather.Actual direct labor was 1,500 hours at $15 per hour.
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Calculate the labor rate variance and the labor efficiency variance, respectively.
A) $4,500 U and $3,000 U
B) $4,500 F and $3,000 F
C) $4,500 U and $3,000 F
D) $4,500 F and $3,000 U

Question

Bortello Corporation produces high-quality leather boots.The company has a standard cost system and has set the following standards for materials and labor:  
 
 During the year Bortello produced 125 boots.Actual leather purchased was 1,700 strips, at $16 per strip.There were no beginning or ending inventories of leather.Actual direct labor was 1,500 hours at $15 per hour.
- 
Calculate the labor rate variance and the labor efficiency variance, respectively.
A) $4,500 U and $3,000 U 
B) $4,500 F and $3,000 F 
C) $4,500 U and $3,000 F 
D) $4,500 F and $3,000 U

Quizplus · Accepted Answer

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Bortello Corporation Produces High-Quality Leather Boots