Question

D Question 23 1 pts Keys Corporation makes a product with the following standard costs: Standard Quantity Standard Price Standard Cost Per Unit Direct materials 6.5 pounds $7.00 per pound $45.50 Direct labor 0.6 hours $ 24.00 per hour $14.40 Variable overhead 0.6 hours $ 4.00 per hour $ 2.40 In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. e 4,731 F 0 4,560 U 0 4,560 F 0 4,731 U 1 pts Question 24

Answer 1

Answer- Direct Labor Efficiency variance =$4560 U.

Explanation- Direct Labor Efficiency variance = (Standard hours- Actual hours)*Standard rate per hour

                              =(2100 hours – 2290 hours)*$24.00 per hour

                              = $4560 Unfavorable

Where:-

Standard hours = Standard hours per unit*Actual output

                              =0.6 standard hours per unit*3500 units

                            = 2100 hours