Ch. 7 - Bialetti, Inc. manufactures a moka pot (stovetop expresso maker) and has developed standard costs
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Question:
Ch. 7 - Bialetti, Inc. manufactures a moka pot (stovetop expresso maker) and has developed standard costs for direct material and direct labor. In 2020, Bialetti estimated the following standard costs for one of their major products, the 3-cup Moka Pot.
Budgeted quantity | Budgeted price |
Direct materials | 0.30 pounds | $90 per pound |
Direct labor | 0.25 hours | $30 per hour |
During April, Bialetti produced and sold 15,000 Moka Pots. They purchased 2,300 pounds of direct materials, but used 2,400 pounds of direct materials at an average cost per pound of $92 and 3,750 direct manufacturing labor-hours at an average wage of $91.25 per hour. The direct manufacturing labor efficiency variance during April is ________.
Question 1 options:
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$229,687.5 favorable
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$918,750 unfavorable
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$0
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$85,547 unfavorable
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