Question

Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:

Answer 1

The  labor efficiency variance for Bodacious Corporation is $480 (F).

What is labor efficiency variance?

• The ability to employ labor in accordance with expectations is measured by the labor efficiency variance.
• The variation can be used to highlight the parts of the production process that are taking longer than expected to complete.
• Industrial engineers will analyze the underlying process to determine if it can be improved to decrease the number of production hours needed if the variance outcome is unfavorable.
• Some potential improvements include:
• Streamlining the product's design to speed up assembly
• a decrease in the procedure's overall scrap output
• the level of automation rising
• Changing the process
• If this is not possible, the normal number of hours needed to make an item is increased to better reflect the amount of efficiency that actually exists.

Materials: Standard Actual

Standard: 200 pounds at $3.00 per pound $600

Actual: 220 pounds at $2.85 per pound $627

Direct labor:

Standard: 400 hours at $15.00 per hour $6,000

Actual: 368 hours at $16.50 per hour $6,072

Therefore, The  labor efficiency variance for Bodacious Corporation is $480 (F).

Know more about labor efficiency variance with the help of the given link:

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