The labor efficiency variance for January is A 2200 U B 2002

The labor efficiency variance for January is:

          A.

$2,200 U

          B.

$2,002 F

          C.

$2,200 F

          D.

$2,002 U

A.	$2,200 U
B.	$2,002 F
C.	$2,200 F
D.	$2,002 U

Direct materials. Direct labor. Variable overhead. Standard Quantity or Hours 6.5 kilos 0.3 hours 0.3 hours Standard Price or Rate $1.00 per kilo $10.00 per hour $4.00 per hour Standard Cost Per Unit $6.50 $3.00 $%1.20

Solution

Actual production = 7500 units

Standard quantity per unit = 0.3 hour

Total standard labor hours for actual production = Actual production*Standard quantity per unit

= 7500 units*0.3 hour = 2250 hours

Actual direct labor hours = 2030 hours

Standard rate = $10 per hour

Labor efficiency variance = (Total standard labor hours for actual production - Actual direct labor hours)*Standard rate

= (2250 - 2030)*10 = 2200F

Answer is C. 2200F