Furson Corporation Makes a Single Product

question 165

Multiple Choice

Furson Corporation makes a single product.In a recent period 6,500 units were made and there was an unfavorable labor efficiency variance of $26,000.Direct labor workers were paid $8 per hour and total wages were $182,000.The labor rate variance was zero.The standard labor-hours per unit of output is closest to:

• A)3.0
• B)3.5
• C)4.0
• D)4.5

---

Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor usage.

Direct Labor-Hours

Entire duration of work by employees intricately involved in the manufacturing phase.

Machine-Hours

A measure of production output or activity calculated as the total hours that machines are operated over a specific period.

Standard Hours Allowed

The amount of work time allowed for the completion of a task, against which actual hours are compared for performance analysis.