Margo Corporation produces air filtration systems. Information pertaining to the company's monthly direct labor usage...
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Margo Corporation produces air filtration systems. Information pertaining to the company's monthly direct labor usage is provided as follows.
Standard labor rate per hour | $ | 20 | |
Standard hours allowed per filtration system | 1.0 | hours | |
Actual filtration systems produced during the current month | 18,000 | units | |
Actual labor hours worked during the current month | 14,400 | hours | |
Actual labor cost for the current month | $ | 331,200 | |
a.Compute the company's labor rate variance.
b.Compute the company's labor efficiency variance. An extremely large order of air filtration systems was filled during the month for exportation to China. Filling this order resulted in extended hours for many of the company's workers. c-1.Which labor variance reflects the extra hours worked by Margo's employees?
c-2.Was their time well utilized?
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