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15 January, 23:07

The manager provided the following information. Direct manufacturing labor hours: 1,200 hours Actual units produced: 0.12 hour/unit Budgeted direct manufacturing labor hours: 12,000 units Budgeted direct manufacturing labor rate: $25 per hour Actual direct manufacturing labor rate: $24 per hour Compute the direct manufacturing labor efficiency variance.

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  1. 16 January, 00:43
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    yee

    Explanation:yee
  2. 16 January, 01:27
    0
    Direct labor efficiency variance = $6,000 favorable

    Explanation:

    Giving the following information:

    Direct manufacturing labor hours: 1,200 hours

    Actual units produced: 12,000 units

    Budgeted direct manufacturing labor hours: 0.12 hour/unit

    Budgeted direct manufacturing labor rate: $25 per hour

    Actual direct manufacturing labor rate: $24 per hour

    To determine the direct labor efficiency rate, we need to use the following formula:

    Direct labor efficiency variance = (Standard Quantity - Actual Quantity) * standard rate

    Standard quantity = 0.12*12,000 units = 1,440 hours

    Actual quantity = 1,200 hours

    Direct labor efficiency variance = (1,440 - 1,200) * 25 = $6,000 favorable

    It is favorable because it used a smaller number of hours to produce 12,000 units.
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