Answer:
option (2) $420.00 F
Explanation:
Data provided in the question:
standard direct labor-hours required = 4
Actual units made = 3,350
Budgeted units = 3,350 + 150 = 3,500
Budgeted direct labor cost = $117,600
Direct labor cost incurred = $111,850
Direct labor-hours worked = 13,450
Now,
Labor efficiency variance = (Actual hours - standard hours) × standard rate
also,
Standard rate
= Budgeted direct labor cost ÷ ( direct labor-hours required × Budgeted units )
= $117,600 ÷ ( 4 × 3500 )
= $8.4
Thus,
Labor efficiency variance = [ 13,450 - (4 × 3,350) ] × $8.4
= $420 [positive answer mean Favorable ]
Hence,
The correct answer is option (2) $420.00 F