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Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are labor
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are labor (3.5 hours/unit * $20/hour) = $70/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from In-process beginning inventory In-process ending inventory-80% complete as to labor Units completed during the period Budgeted output Purchases of materials (in kilograms) Total actual direct labor cost incurred Direct labor hours worked (AQ) Materials purchase-price variance Increase in materials inventory in December None 1,100 units 6,980 units 7,620 units 47,000 $552,420 27,900 hours $ 8,460 favorable 5,050 kilograms The direct labor efficiency variance for December, to the nearest dollar, was: Multiple Choice $5,580 favorable. O $2,220 favorable. $7,800 unfavorable. $59,970 unfavorable
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