Answer the following question using the information below:

Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

Budgeted quantity Budgeted price

Direct materials 0.10 pounds $30 per pound

Direct labor 0.05 hours $15 per hour

During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour.

Required;

1. June's direct manufacturing labor efficiency variance is:

Group of answer choices:

O $125 favorable

O $7,623.50 unfavorable

O $125 unfavorable

O None of these answers are correct.

Question

Business

Wade Velazquez

20 November, 04:38

Answer the following question using the information below:

Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

Budgeted quantity Budgeted price

Direct materials 0.10 pounds $30 per pound

Direct labor 0.05 hours $15 per hour

During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour.

Required;

1. June's direct manufacturing labor efficiency variance is:

Group of answer choices:

O $125 favorable

O $7,623.50 unfavorable

O $125 unfavorable

O None of these answers are correct.

+3

Answers (1)

Know the Answer?

Lutz · Answer 1

O None of these answers are correct.

Explanation:

The computation of the direct manufacturing labor efficiency variance is shown below;

= Standard labor rate * (Standard hours for actual output - Actual hours)

where,

Standard labor rate is $15

Standard hours for actual output would be

= 10,000 containers * 0.05 hours

= 500 hours

And, actual hour is 500 hours

Now put these values to the above formula

So, the value would equal to

= $15 * (500 hours - 500 hours)

= $0