Question

Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container. Budgeted quantity Budgeted price Direct materials 0.10 pounds $30 per pound Direct labor 0.05 hours $15 per hour During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour. June's direct manufacturing labor efficiency variance is: Group of answer choices $125 favorable $7,623.50 unfavorable $125 unfavorable None of these answers are correct.

Answer 1

Answer:

Explanation:

Labor Rate Variance = (Budgeted Rate-Actual Rate) * Direct manufacturing labor hours

= (15 - 15.25)* 500

= 125 Unfavorable