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The standards for direct labor for a product are 7 hours at $5 per hour. Last month, 9,700 units of the product were made and the labor efficiency variance was $8,700 F. The actual number of hours worked during the past period was:

a)            65,160

b)            68,900

c)            66,160

d)            67,900

Question:2

Hurren Corporation makes a product with the following standard costs:

Inputs                   Standard Quantity or Hours         Standard Price or Rate   Standard Cost Per Unit

Direct materials                                4.5 grams                                             $5.00 per gram                  $22.50         

Direct labor                         0.8 hours                                             $10.00 per hour                                $8.00         

Variable overhead           0.8 hours                                             $5.00 per hour                   $4.00         

The company reported the following results concerning this product in June.

 

  Originally budgeted output                                       6,700units

  Actual output                                                                  6,600units

  Raw materials used in production                           28,390grams

  Actual direct labor-hours                                            4,600hours

  Purchases of raw materials                                        31,900grams

  Actual price of raw materials purchased              $5.10per gram

  Actual direct labor rate                                                $10.90per hour

  Actual variable overhead rate                                  $4.70per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials price variance is computed when the materials are purchased.

The materials quantity variance for June is:

a)            $6,550 F

b)            $6,681 F

c)            $6,681 U

d)            $6,550 U


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