The following labor standards have been established for a particular product:

- Standard labor-hours per unit of output: 9.9 hours
- Standard labor rate: $13.70 per hour

The following data pertain to operations concerning the product for the last month:

- Actual hours worked: 7,700 hours
- Actual total labor cost: $102,410
- Actual output: 1,000 units

What is the labor efficiency variance for the month?

A. $33,220 U
B. $33,220 F
C. $29,260 F
D. $30,140 F

Question

High School

Answer :

Yormex Yormex · Answer 1 · 2025-05-21T09:38:05-04:00

The labor efficiency variance for the month is option D. $30,140 F (Favorable).

To calculate the labor efficiency variance, you can use the following formula:

Labor Efficiency Variance = (Standard Labor Hours - Actual Labor Hours) × Standard Labor Rate

Where:

- Standard Labor Hours per unit of output = 9.9 hours

- Actual Labor Hours worked = 7,700 hours

- Standard Labor Rate = $13.70 per hour

First, calculate the standard labor hours for the actual output:

Standard Labor Hours = Standard Labor Hours per unit of output × Actual Output

Standard Labor Hours = 9.9 hours/unit × 1,000 units = 9,900 hours

Now, calculate the labor efficiency variance:

Labor Efficiency Variance = (9,900 hours - 7,700 hours) × $13.70/hour

Labor Efficiency Variance = 2,200 hours × $13.70/hour

Labor Efficiency Variance = $30,140

So, the labor efficiency variance for the month is $30,140 F (Favorable).

The correct answer is d. $30,140 F.

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