As part of a good Section 351 transaction Andy contributes his business with a basis of $200,000 in exchange for $300,000 worth
1 answer:
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Answer:
$17,000 Favorable
Explanation:
Provided information, we have
Standard hours for each unit = 0.8 hours
Standard Rate per hour = $34
Actual quantity produced = 7,650 units
Actual labor hours used = 5,620
Actual rate per hour = $118,020/5,620 = $21 per hour
Standard hours for Actual output = 7,650 0.8 = 6,120 hours
Labor Efficiency Variance = (Standard Hours - Actual Hours) Standard labor rate per hour
= (6,120 - 5,620) $34
= $17,000 Favorable
As the amount is positive and actual hours used is less than standard hours the variance is favorable.