Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for t

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2 years ago

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he 100 units of Product AA are as follows:

1 answer:

andre [41] · Answer 1 · 2023-09-30T21:59:32+03:00

The labor efficiency variance for Bodacious Corporation is $480 (F).

<h3><u>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).

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