Electric Zero Produces Relay Units for Generators

question 142

Multiple Choice

Electric Zero produces relay units for generators.Each relay has a standard cost of $67.Standards call for two relays per generator.In July, the company purchased 120 relays for $7,560.The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process.The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23.In July, the company incurred 1,020 labor hours at a cost of $22,950.How much is the labor efficiency variance?

• A)$460 unfavorable
• B)$50 favorable
• C)$510 favorable
• D)$460 favorable

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Definitions:

Average Variable Cost Curve

A graphical representation that shows the relationship between a firm's total variable costs and output levels.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced.

Spreading

The act of extending or distributing something over a wider area or among a larger number of people.

Overhead

Fixed costs that are not directly tied to production levels, such as rent, utilities, and administrative expenses, affecting a company's profitability.