Answer :
To determine the labor efficiency variance for the month, we need to follow these steps:
1. Calculate the standard hours allowed for the actual output:
The standard hours allowed is computed by multiplying the standard labor-hours per unit by the actual number of units produced.
[tex]\[ \text{Standard hours allowed} = \text{Standard labor-hours per unit} \times \text{Actual output} \][/tex]
Given:
- Standard labor-hours per unit: 8.3 hours
- Actual output: 900 units
[tex]\[ \text{Standard hours allowed} = 8.3 \, \text{hours/unit} \times 900 \, \text{units} \][/tex]
[tex]\[ \text{Standard hours allowed} = 7470 \, \text{hours} \][/tex]
2. Calculate the labor efficiency variance:
Labor efficiency variance is computed by taking the difference between the standard hours allowed and the actual hours worked, and then multiplying by the standard labor rate.
[tex]\[ \text{Labor efficiency variance} = \text{Standard labor rate} \times (\text{Standard hours allowed} - \text{Actual hours worked}) \][/tex]
Given:
- Standard labor rate: [tex]$12.10 per hour - Actual hours worked: 6100 hours \[ \text{Labor efficiency variance} = 12.10 \, \text{\$[/tex]/hour} \times (7470 \, \text{hours} - 6100 \, \text{hours})
\]
[tex]\[ \text{Labor efficiency variance} = 12.10 \, \text{\$/hour} \times 1370 \, \text{hours} \][/tex]
[tex]\[ \text{Labor efficiency variance} = 16577 \, \text{\$} \][/tex]
3. Determine if the variance is favorable (F) or unfavorable (U):
A positive variance indicates that fewer hours were worked than the standard allowed hours, which is favorable. Conversely, a negative variance indicates that more hours were worked than the standard allowed hours, which is unfavorable.
Since the calculated labor efficiency variance is positive ([tex]$16,577), it is favorable (F). Therefore, the labor efficiency variance for the month is: \[ \$[/tex] 16,577 \, F
\]
The correct answer is:
A) [tex]$\$[/tex] 16,577 F$
1. Calculate the standard hours allowed for the actual output:
The standard hours allowed is computed by multiplying the standard labor-hours per unit by the actual number of units produced.
[tex]\[ \text{Standard hours allowed} = \text{Standard labor-hours per unit} \times \text{Actual output} \][/tex]
Given:
- Standard labor-hours per unit: 8.3 hours
- Actual output: 900 units
[tex]\[ \text{Standard hours allowed} = 8.3 \, \text{hours/unit} \times 900 \, \text{units} \][/tex]
[tex]\[ \text{Standard hours allowed} = 7470 \, \text{hours} \][/tex]
2. Calculate the labor efficiency variance:
Labor efficiency variance is computed by taking the difference between the standard hours allowed and the actual hours worked, and then multiplying by the standard labor rate.
[tex]\[ \text{Labor efficiency variance} = \text{Standard labor rate} \times (\text{Standard hours allowed} - \text{Actual hours worked}) \][/tex]
Given:
- Standard labor rate: [tex]$12.10 per hour - Actual hours worked: 6100 hours \[ \text{Labor efficiency variance} = 12.10 \, \text{\$[/tex]/hour} \times (7470 \, \text{hours} - 6100 \, \text{hours})
\]
[tex]\[ \text{Labor efficiency variance} = 12.10 \, \text{\$/hour} \times 1370 \, \text{hours} \][/tex]
[tex]\[ \text{Labor efficiency variance} = 16577 \, \text{\$} \][/tex]
3. Determine if the variance is favorable (F) or unfavorable (U):
A positive variance indicates that fewer hours were worked than the standard allowed hours, which is favorable. Conversely, a negative variance indicates that more hours were worked than the standard allowed hours, which is unfavorable.
Since the calculated labor efficiency variance is positive ([tex]$16,577), it is favorable (F). Therefore, the labor efficiency variance for the month is: \[ \$[/tex] 16,577 \, F
\]
The correct answer is:
A) [tex]$\$[/tex] 16,577 F$