A Company Has a Standard of 2 Hours of Direct

question 8

Multiple Choice

A company has a standard of 2 hours of direct labor per unit produced and $18 per hour for the labor rate.During last period,the company used 9,500 hours of direct labor at a $152,000 total cost to produce 4,000 units.Compute the direct labor rate and efficiency variances.

• A) Rate variance: $19,000 unfavorable; Efficiency variance: $27,000 favorable.
• B) Rate variance: $63,829 unfavorable; Efficiency variance: $99,000 unfavorable.
• C) Rate variance: $152,000 favorable; Efficiency variance: $99,000 unfavorable.
• D) Rate variance: $19,000 favorable; Efficiency variance: $27,000 unfavorable.
• E) Rate variance: $152,000 unfavorable; Efficiency variance: $99,000 favorable.