Budgeted Purchases = Sales units + Closing inventory - Beginning Inventory
= 5,000 + (1,000 * 130%) - 1,000
= 5,300 units
I think it all depends on the level of expertise that the mechanic has. If they are a beginner than they may take longer than someone who has fixed the problem multiple times and knows what they are doing. Although a beginner may be cheaper, they may take longer to fix the problem. And it also depends on what they are fixing.
Answer:
$130 Favourable
Explanation:
Given the above information,
Standard hours = 2 × 4770 = 9,540
Actual hours = 8,940
Standard rate = $32.50
Then, Direct labor efficiency variance is computed as
= ( Standard hours allowed for production - Actual hours taken) × Standard rate per direct labor hour
= [(2 × 4,770) - 8,940] × $32.50
= [9,540 - 8,940] × $32.50
= 600 × $32.50
= $130 Favourable
I believe this answer is true.
