The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: Actual CostsStandard CostsDirect Material6,200 lb. @ $3.906,000 lb. @ $4.00Direct Labor4,300 hrs. @ $14.704,000 hrs. @ $15.00 Determine the labor efficiency variance. Select one:a. $4,410 Ub. $4,410 Fc. $4,500 Fd.$4,500 Ue.None of the above

Actual hours worked = 4,300 hoursStandard labor hours allowed = 4,000 hoursStandard rate = 15 Labor…

Answered: The following actual and standard cost…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product:

	Actual Costs	Standard Costs
Direct Material	6,200 lb. @ $3.90	6,000 lb. @ $4.00
Direct Labor	4,300 hrs. @ $14.70	4,000 hrs. @ $15.00

Determine the labor efficiency variance.

Select one:

a. $4,410 U

b. $4,410 F

c. $4,500 F

d.
$4,500 U

e.
None of the above

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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