Amos, IncUses a Standard Cost System with the Following Labor Standards

question 145

Essay

Amos, Inc.uses a standard cost system with the following labor standards for one unit of product: standard hours 0.2 and standard wage rate $12.During January, Amos incurred 3,700 hours of direct labor and paid $45,325 in wages in production of 18,000 units.
Required:
Calculate the direct labor rate and efficiency variances and indicate whether the variances are favorable or unfavorable.

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Definitions:

Economic Resources

Assets owned by businesses or individuals that have the ability to produce value or generate income in the future.

Balance Sheet

A report showing a business's assets, debts, and owner's equity on a particular date.

Long-Term Liabilities

Company debts that are payable beyond a year from now.

Capital Leases Payable

The liability account that records the present value of future lease payments for assets obtained through capital leases.