ABC Company's Standard Direct Labor Cost Per Unit Includes 3

question 41

Multiple Choice

ABC Company's standard direct labor cost per unit includes 3 hours @ $15 per hour. During May ABC Company produced 380 units and incurred total labor cost of $16,200 for 1,200 actual direct labor hours worked. ABC's labor efficiency variance for May is:

• A) $0.
• B) $900 U.
• C) $300 U.
• D)$900 F.

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Definitions:

Standard Number

A benchmark or specific figure considered normal or expected under standard conditions in accounting and manufacturing.

Machine-Hours

An operational metric indicating the total hours a piece of machinery is utilized during a specified timeframe, frequently used for costing and efficiency calculations.

July Production

The volume or quantity of goods and services produced by a company during the month of July.

Variable Overhead Efficiency Variance

The difference between actual and expected (or budgeted) variable overhead costs based on the actual level of production or activity.