3rd tutorial 497847

Beakins Company produces a single product. The standard cost card for the product follows:

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Direct materials (4 yards @ $5 per yard)……………………………..

$20

Direct labor (1.5 hours @ $10 per hour)………………………………

$15

Variable manufacturing overhead (1.5 hrs @ $4 per /hour)…….

$6

During a recent period the company produced 1,200 units of product. Various costs associated with the production of these units are given below:

Direct materials purchased (6,000 yards)…………..

$28,500

Direct materials used in production………………….

5,000

yards

Direct labor cost incurred (2,100 hours)…………….

$17,850

Variable manufacturing overhead cost incurred…

$10,080

The company records all variances at the earliest possible point in time. Variable manufacturing overhead costs are applied to products on the basis of direct labor hours.

The labor efficiency variance for the period is:

$3,000 U

$2,550 U

$2,550 F

$3,000 F

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