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Managerial Accounting

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Calculation of Variances

MGRACT-59HHJU

XYZ Repair Shop fixed 550 widgets during June, using 1,447 labor hours. The standards indicate that a widget, on average, should take 2.5 hours to repair. The standard labor rate is \$19 per hour, while the actual rate averaged \$18.80 per hour.

Compute the labor efficiency variance for June.

A

$1,368 Unfavorable

B

$1,354 Unfavorable

C

$14 Favorable

D

$289 Favorable