The following information is to be used for the next three questions:
Downward Inc. manufactures and sells a product, Z30. The per unit, standards for the direct costs of product Z30 are as follows:
2.8 kg of material at a cost of $12.50 per kg
0.60 direct labour hours at a direct labour rate of $35.00 per direct labour hour
During the year, Downward Inc. purchased and used 18,000 kg of material at a total cost of $193,500 to manufacture 5,000 units of Z30. This required 2,300 direct labour hours at a total cost of $87,400.
The labor efficiency variance for the year is:
A. $ 6,900 favorable
B. $31,400 favorable
C. $17,600 favorable
D. $24,500 favorable