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11. Hurren Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials
11. Hurren Corporation makes a product with the following standard costs: |
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |
Direct materials | 3.8 grams | $4.00 per gram | $15.20 |
Direct labor | 0.8 hours | $10.00 per hour | $8.00 |
Variable overhead | 0.8 hours | $4.00 per hour | $3.20 |
The company reported the following results concerning this product in June. |
Originally budgeted output | 7,700 | units |
Actual output | 7,600 | units |
Raw materials used in production | 28,320 | grams |
Actual direct labor-hours | 5,500 | hours |
Purchases of raw materials | 31,200 | grams |
Actual price of raw materials purchased | $4.10 | per gram |
Actual direct labor rate | $10.90 | per hour |
Actual variable overhead rate | $3.70 | per hour |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. |
The labor efficiency variance for June is: |
A. $6,322 U
B. $5,800 U
C. $6,322 F
D. $5,800 F
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