The Litton Company Has Established Standards as Follows

question 126

Multiple Choice

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit $4 per pound = $12 per unit
Direct labor: 2 hours per unit $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
-The labor efficiency variance is:

• A)$800 F
• B)$800 U
• C)$840 F
• D)$840 U

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