Question
Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 2004,RII estimated the following standard costs for one of their major
Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 2004,RII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantityBudgeted price
Directmaterials0.10pounds$30 per pound
Direct labor0.05hours$15 per hour
During June RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wageof $15.25 per hour.
June's direct manufacturing labor efficiency variance is
A. $62.50 unfavorable
B. $62.50 favorable
C. $3,811.75 unfavorable
D. none of the above
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