question 2 the following labor standards have been established for a particular product: standard labor-hours per unit of output 7.5 hours standard labor rate $15.25 per hour the following data pertain to operations concerning the product for the last month: actual hours worked 9,600 hours actual total labor cost $144,480 actual output 1,200 units what is the labor efficiency variance for the month? $9,030 u $7,230 f $9,150 u $7,230 u

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06-12-2022
Business

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question 2 the following labor standards have been established for a particular product: standard labor-hours per unit of output 7.5 hours standard labor rate $15.25 per hour the following data pertain to operations concerning the product for the last month: actual hours worked 9,600 hours actual total labor cost $144,480 actual output 1,200 units what is the labor efficiency variance for the month? $9,030 u $7,230 f $9,150 u $7,230 u

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smecloudbird18 smecloudbird18 · Answer 1 · 2022-12-18T10:03:14+01:00

The correct answer is $9,030.The labor efficiency variance measures the difference between the actual labor hours worked and the standard labor hours for a given output.

To calculate the labor efficiency variance for the month, we need to multiply the difference between the actual hours worked (9,600) and the standard hours per unit (7.5) by the standard labor rate ($15.25).

The labor efficiency variance for the month is therefore: (9,600 - 7.5 x 1,200) x $15.25 = $9,030 U (unfavourable).

Labour efficiency is an integral part of your business, as it tells you how efficient your mechanics are, over time. It is also a key performance indicator (KPI) which defines how much of the technician's time is spent working productively.

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