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rusak2 [61]
3 years ago
6

Ramona Company has the following labor-related data.Standard labor hours for output: 15,000 hoursStandard labor rate: $10 per ho

urActual labor rate: $8 per hourActual labor hours: 17,500 hoursGiven this information, the labor EFFICIENCY variance isA. $10,000 favorableB. $35,000 unfavorableC. $35,000 favorableD. $10,000 unfavorableE. $25,000 unfavorableF. $25,000 favorable
Business
1 answer:
Alik [6]3 years ago
8 0

Answer:

E. $25,000 unfavorable

Explanation:

The labor efficiency variance shall be calculated using the following formulas:

Labor efficiency variance=((Standard labor hours used to make the actual production )- (Actual labor hours used to make the actual production))* standard rate per hour

Standard labor hours used to make the actual production=15,000

Actual labor hours used to make the actual production=17,500

standard rate per hour=$10 per hour

Labour efficiency variance=(15,000-17,500)*10

                                           =25,000 unfavourable

So based on the above discussion, the answer shall be E. $25,000 unfavorable

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