Question

TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product. Standard Standard Standard Quantity Price Cost Direct Materials 9 pounds $ 1.80 per pound $ 16.20 Direct Labor 0.25 hour $ 7.20 per hour 1.80 $ 18.00 During November, TaskMaster purchased 198,000 pounds of direct materials at a total cost of $376,200. The total factory wages for November were $46,000, 90% of which were for direct labor. TaskMaster manufactured 21,000 units of product during November using 170,000 pounds of direct materials and 6,000 direct labor hours. What is the direct labor efficiency variance for November

Answer 1

Answer:

Direct labor time (efficiency) variance= $5,400 unfavorable

Explanation:

Giving the following information:

Standard= Direct Labor 0.25 hour $ 7.20 per hour

Actual= 6,000 hours

Number of units= 21,000

To calculate the direct labor efficiency variance, we need to use the following formula:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (21,000*0.25 - 6,000)*7.2

Direct labor time (efficiency) variance= (5,250 - 6,000)*7.2

Direct labor time (efficiency) variance= $5,400 unfavorable