Gilder Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. 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 June is:

Question

Gilder Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in June.  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 June is:

Quizplus · Accepted Answer

SH = 5,500 units × 0.1 hours per unit = 550 hours
Labor efficiency variance = (AH - SH)× SR
= (510 hours - 550 hours)× $16.00 per hour
= (-40 hours)× $16.00 per hour
= $640 F

Gilder Corporation Makes a Product with the Following Standard Costs