Question
H Corporation uses a standard cost system. Standard direct labor costs are 9 dollars per hour, with an efficiency standard o .25 hour per finished
H Corporation uses a standard cost system. Standard direct labor costs are 9 dollars per hour, with an efficiency standard o .25 hour per finished unit. Variable factory overhead is applied at the rate of 4 dollars per direct labor hour. In March, the company produced 8,000 finished units which using 2,200 direct labor hours at a total cost of 21,000 dollars. Actual variable factory overhead costs incurred totaled 9,500 dollars. Determine the labor and variable overhead variances, label them by name, indicate if each is favorable or unfavorable, and identify the position of the individual we would question to find more about why the variance occurred.
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