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Kildare Company manufactures 100-pound bags of mulch that have the following unit standard costs for direct materials an...

Kildare Company manufactures 100-pound bags of mulch that have the following unit standard costs for direct materials and direct labor: Direct materials (100 lbs. @ $0.40 per lb.) $40.00 Direct labor (0.5 hours at $18 per hour) 9.00 Total standard prime cost per 100-lb. bag $49.00 The following activities were recorded for October: • 2,000 bags were manufactured. • 190,000 lbs. of materials costing $70,000 were purchased. • 205,000 lbs. of materials were used. • $19,000 was paid for 950 hours of direct labor. There were no beginning or ending work-in-process inventories. What is the labor efficiency variance for Kildare Company? a. $1,000 U b. $1,000 F c. $1,900 U d. $900 F

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Answer #1

ANSWER:

Labor efficiency variance = (Standard hours-actual hours)standard rate

= (2000*0.5-950)18

Labor efficiency variance = 900 Favourable

hence OPTION D is correct answer (D)=900 F

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