Show all the work Basix Inc. calculates direct manufacturing labor variances and

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Basix Inc. calculates direct manufacturing labor variances and has the following information: 3. Actual hours worked: 200 Standard hours: 2560 Actual rate per hour: $12 Standard rate per hour: $10 Given the information above, which of the following is correct regarding direct manufacturing labor variances? a. The price and efficiency variances are favorable. b. The price and efficiency variances are unfavorable. c. The price variance is favorable, while the efficiency variance is unfavorable. d. The price variance is unfavorable, while the efficiency variance is favorable.

Explanation / Answer

Actual hour is lower than standard hour so labour efficiency variance is favorable

Actual rate is higher than standard rate so labour rate variance is unfavorable

so answer is d) The price variance is unfavorable, while the efficiency variance is favorable

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