Labor Efficiency Variance

Tharaldson Corporation makes a product with the following standard costs Standard Standard Quantity or Standard Price or Cost Per Unit Hours 5.8 ounces 0.5 hours 0.5 hours Rate Direct materials Direct labor Variable overhead $12.00 per hour 5.00 per hour 3.00 per ounce $17.40 $6.00 2.50 The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost 3,800 units 3,400 units 20,800 ounces 21,900 ounces 520 hour $42,500 $13,800 3,900 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased Multiple Choice $16,560 F $14,160 U $16,560 U $14,160 F