Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $24.50 per hour. During July, Whitman paid $189,800 to employees for 8,930 hours worked. 4,790 units were produced during July. What is the direct labor efficiency variance? Multiple Choice $15,925 favorable $44,910 favorable $28,985 unfavorable $28,985 favorable
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.
Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $24.50 per hour. During July, Whitman paid $189,800 to employees for 8,930 hours worked. 4,790 units were produced during July. What is the direct labor efficiency variance?
Multiple Choice
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$15,925 favorable
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$44,910 favorable
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$28,985 unfavorable
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$28,985 favorable
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