Cost standards for one unit of product no. C77 Direct material 3 pounds at $2.80

Question

Cost standards for one unit of product no. C77 Direct material 3 pounds at $2.80 per pound Direct labor 6 hours at $7.30 per hour 8.40 43.80 Actual results Units produced 6,600 units Direct material purchased 26,400 pounds at $3.00 Direct material used 19,500 pounds at $3.00 Direct labor 40,500 hours at $7.10 $79,200 58,500 287550 38 Assume that the company computes variances at the earlest point in time. The direct-labor efficiency variance is O $7.980F $7980U O $6.570F O $6.570U None of these 39 Assume that the company computes variances at the earliest point in time. The standard hours allowed for the work performed are: 40,000. 39,750 O 39,600 39.500 None of these

Explanation / Answer

Answer to 38 is $6570 Unfav

Answer to 39

Answer is 39600 Hours

Standard Hours = Standard Hour Per Unit x Actual Hours

= 6 x 6600

= 39600

Direct Labor Efficiency Variance = (Standard Hours- Actual Hours) x Standard Rate                                                              = [6600 x 6 - 40500] x 7.30                                                              = 6570 Unfav

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