We appreciate your visit to R Corp has the following direct labor DL standards DL hours per unit 1 75 DL cost per hour 28 00 R Corp used 7. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
The DL efficiency variance can be determined by comparing the actual DLHRS used to produce the given number of units with the standard DLHRS allowed for the same number of units.
DLHRS/UNIT: 1.75
DL$/HR: $28.00
Actual DLHRS used: 7,120
Number of units produced : 4,000
Standard DLHRS allowed = DLHRS/UNIT * Number of units produced
= 1.75 * 4,000
= 7,000
DL efficiency variance = Standard DLHRS allowed - Actual DLHRS used
= 7,000 - 7,120
= -120
A favorable DL efficiency variance occurs when fewer DLHRS are used than the standard allows. In this case, the actual DLHRS used (7,120) exceeds the DLHRS allowed (7,000). Therefore, the DL efficiency variance is unfavorable (unfavorable = "unfav").
The DL efficiency variance is unfavorable (unfav) because the actual DLHRS used (7,120) exceeds the standard DLHRS allowed (7,000) by 120 hours.
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