MajorNet Systems has budgeted three hours of direct labor per connector, at a standard cost of $17 per hour. During August, technicians actually worked 189 hours completing 84 connectors. All 84 connectors actually produced were sold. MajorNet paid the technicians $17.80 per hour. What is MajorNet’s direct labor efficiency variance for August? a. $919.80 F b. $1,071.00 F c. $1,121.40 F d. $3,364.20 F
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
MajorNet Systems has budgeted three hours of direct labor per connector, at a
What is MajorNet’s direct labor efficiency variance for August?
a. $919.80 F
b. $1,071.00 F
c. $1,121.40 F
d. $3,364.20 F
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