Tout Corporation makes a product that has the following direct labor standards: The company budgeted for production of 6,400 units in October,but actual production was 6,500 units.The company used 610 direct labor-hours to produce this output.The actual direct labor rate was $21.80 per hour. The labor efficiency variance for October is:

Question

Tout Corporation makes a product that has the following direct labor standards:  The company budgeted for production of 6,400 units in October,but actual production was 6,500 units.The company used 610 direct labor-hours to produce this output.The actual direct labor rate was $21.80 per hour. The labor efficiency variance for October is:

Quizplus · Accepted Answer

SH = 6,500 units × 0.10 hours per unit = 650 hours
Labor efficiency variance = (AH - SH)× SR
= (610 hours - 650 hours)× $22.00 per hour
= (-40 hours)× $22.00 per hour
= $880 F

Tout Corporation Makes a Product That Has the Following Direct