Question
Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles
Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established: Direct materials: 4 lbs. @ $1.50 Direct labor: 1.25 hrs. @ $16.00 During December, 58,000 pounds of materials were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs: Direct materials: $89,000 Direct labor: $294,500 (at $15.50 per hour) What are the (1) direct labor rate variance and (2) direct labor efficiency variance? (1) $8,500 U; (2) $3,000 F (1) $9,000 F; (2) $3,000 U (1) $8,000 U; (2) $4,000 F O (1) $9,500 F; (2) $4,000 U
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