Berends Corporation makes a product with the following standard costs: The company reported the following results concerning this product in April. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for April is:

Question

Berends Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in April.  The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for April is:

Quizplus · Accepted Answer

SH = 8,800 units × 0.3 hours per unit = 2,640 hours
Labor efficiency variance = (AH - SH)× SR
= (2,560 hours − 2,640 hours)× $17.00 per hour
= (−80 hours)× $17.00 per hour
= $1,360 F

Berends Corporation Makes a Product with the Following Standard Costs