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The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ 84 per pound = $12 per unit Direct labor: 2
The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ 84 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. 600 units 2,000 pounds $11,400 $9,240 $5,720 Units produced... Direct material used. Direct material purchased (3,000 pounds) ............. Direct labor cost (1,100 hours) ......... . ........... Variable manufacturing overhead cost incurred...... The labor efficiency variance is: A. $800 F B. $840 U C. $800 U D. $840 F
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