Question
Consider the flexible budget information for Eagle, Inc., a company that produces decorative mailboxes: 5,500 Mailboxes 6,000 Mailboxes 6,500 Mailboxes Direct Labor $270,600 $295,200 $319,800
Consider the flexible budget information for Eagle, Inc., a company that produces decorative mailboxes:
5,500 Mailboxes | 6,000 Mailboxes | 6,500 Mailboxes | |
Direct Labor | $270,600 | $295,200 | $319,800 |
Each mailbox requires 6 hours of labor. Eagles budgeted production at the start of the year was 6,000 mailboxes, but actual production was 6,100 mailboxes. Actual direct labor amounted to $300,760 for the 36,500 direct laborhours used in production.
23. What was the direct labor rate variance?
A. $1,460 unfavorable
B. $1,460 favorable
C. $4,120 unfavorable
D. $4,120 favorable
E. None of the above.
24. What was the direct labor efficiency variance?
A. $4,100 unfavorable
B. $5,740 favorable
C. $15,580 favorable
D. $23,780 unfavorable
E. None of the above.
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