Enwall Corporation's standard wage rate is $11.20 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.9 DLHs. In December, 5,900 units were produced, the actual wage rate was $10.20 per DLH, and the actual hours were 14,150 DLHs.
-The Labor Efficiency Variance for December would be recorded as a:
A)debit of $33,152.
B)credit of $30,192.
C)credit of $33,152.
D)debit of $30,192.

Question

Quizplus · Accepted Answer

The Labor Efficiency Variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. In this case, the actual hours are 14,150 DLHs, the standard hours are 5,900 units x 2.9 DLHs = 17,110 DLHs, and the standard rate is $11.20 per DLH. Therefore, the Labor Efficiency Variance is (14,150 DLHs - 17,110 DLHs) x $11.20 per DLH = $33,152. This variance is recorded as a credit because the actual hours were less than the standard hours, indicating that the company was more efficient than expected.

Enwall Corporation's Standard Wage Rate Is $11