A Job Was Budgeted to Require 3 Hours of Labor

question 139

Multiple Choice

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.
-What is the direct labor efficiency variance?

• A) $16,000 unfavorable.
• B) $6,000 unfavorable.
• C) $22,000 unfavorable.
• D) $16,000 favorable.
• E) $22,000 favorable.

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Definitions:

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Shareholder

An individual or entity that owns shares in a corporation and has certain rights and responsibilities.

Corporate Assets

Assets owned by a corporation, including tangible and intangible items, that are used in the operation of the company.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.