The Following Labour Standards Have Been Established for a Particular

question 34

Multiple Choice

The following labour standards have been established for a particular product:
$\begin{array}{|l|r|}\hline \text { Standard labour hours per unit of output } & 8.3 \text { hours } \\\hline \text { Standard labour rate } & \$ 12.10 \text { per hour } \\\hline\end{array}$
The following data pertain to operations concerning the product for the last month:
$\begin{array}{|l|r|}\hline \text { Actual hours worked } & 6,100 \text { hours } \\\hline \text { Actual total labour cost } & \$ 71,370 \\\hline \text { Actual output } & 900 \text { units } \\\hline\end{array}$
What was the labour efficiency variance for the month?

• A) $16,029 favourable.
• B) $16,577 favourable.
• C) $19,017 favourable.
• D) $19,017 unfavourable.

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Definitions:

Lag The Market

A compensation strategy where an organization deliberately sets wage levels below the average market rate, often due to financial constraints or strategic choice.

Compensation Strategy

A plan established by an organization to determine how to reward employees effectively, taking into account salaries, benefits, bonuses, and other forms of compensation.

Turnover Costs

Expenses related to replacing employees who leave the organization, including recruitment, training, and lost productivity.

Recruitment Costs

Expenses incurred by an organization in the process of finding and hiring new employees, including advertising, interviewing, and training expenses.