The labor efficiency variance for Bodacious Corporation is $480 (F).
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What is labor efficiency variance?</u></h3>
- The ability to employ labor in accordance with expectations is measured by the labor efficiency variance.
- The variation can be used to highlight the parts of the production process that are taking longer than expected to complete.
- Industrial engineers will analyze the underlying process to determine if it can be improved to decrease the number of production hours needed if the variance outcome is unfavorable.
- Some potential improvements include:
- Streamlining the product's design to speed up assembly
- a decrease in the procedure's overall scrap output
- the level of automation rising
- Changing the process
- If this is not possible, the normal number of hours needed to make an item is increased to better reflect the amount of efficiency that actually exists.
Materials: Standard Actual
Standard: 200 pounds at $3.00 per pound $600
Actual: 220 pounds at $2.85 per pound $627
Direct labor:
Standard: 400 hours at $15.00 per hour $6,000
Actual: 368 hours at $16.50 per hour $6,072
Therefore, The labor efficiency variance for Bodacious Corporation is $480 (F).
Know more about labor efficiency variance with the help of the given link:
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