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

Question

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

Quizplus · Accepted Answer

SH = 4,200 units × 0.7 hours per unit = 2,940 hours
Labor efficiency variance = (AH - SH)× SR
= (3,160 hours − 2,940 hours)× $20.00 per hour
= (220 hours)× $20.00 per hour
= $4,400 U

Oddo Corporation Makes a Product with the Following Standard Costs