Fender Corporation produced 100 units of Product XX.The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: What is the labour efficiency variance for Fender Corporation?
$\begin{array}{ll}\text { Materials: }&&&\text { Standard}&\text { Actual }\
&\text { Standard: } & 200 \mathrm{~kg} \text { at } \$ 3.00 \text { per kilogram }&\$600 \
&\text { Actual: } & 220 \mathrm{~kg} \text { at } \$ 2.85 \text { per kilogram } &&\$627\
\text { Direct labour: }& \
&\text { Standard: } & 400 \text { hours at } \$ 15.00 \text { per hour }&6,000 \
&\text { Actual: } & 368 \text { hours at } \$ 16.50 \text { per hour }&&6,072
\end{array}$
A)$480 (U)
B)$480 (F)
C)$552 (U)
D)$552 (F)

Question

Fender Corporation produced 100 units of Product XX.The total standard and actual costs for materials and direct labour for the 100 units of Product XX are as follows: What is the labour efficiency variance for Fender Corporation?
$\begin{array}{ll}\text { Materials: }&&&\text { Standard}&\text {  Actual }\
&\text { Standard: } & 200 \mathrm{~kg} \text { at } \$ 3.00 \text { per kilogram }&\$600 \
&\text { Actual: } & 220 \mathrm{~kg} \text { at } \$ 2.85 \text { per kilogram } &&\$627\
\text { Direct labour: }& \
&\text { Standard: } & 400 \text { hours at } \$ 15.00 \text { per hour }&6,000 \
&\text { Actual: } & 368 \text { hours at } \$ 16.50 \text { per hour }&&6,072
\end{array}$
A)$480 (U)
B)$480 (F)
C)$552 (U)
D)$552 (F)

Quizplus · Accepted Answer

The labour efficiency variance is calculated as the difference between the standard labour hours for actual production and the actual labour hours used, multiplied by the standard rate per hour. Here, the standard is 400 hours at $15.00 per hour, and the actual is 368 hours. The calculation is (400 - 368) * $15.00 = 32 * $15.00 = $480. Since actual hours used are less than the standard hours, it's a favorable variance.

Fender Corporation Produced 100 Units of Product XX A)$480 (U) B)$480 (F) C)$552 (U) D)$552 (F)

Fender Corporation Produced 100 Units of Product XX A)$480 (U)
B)$480 (F)
C)$552 (U)
D)$552 (F)