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The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows:
Standard Costs @ 2,500 units:
Direct materials
2,500 kilograms @ $8/kg
Direct labor
7,500 hours @ $12/hr
Actual Costs @ 2,500 units:
2,600 kilograms @ $8.75
7,400 hours @ $11.40
The labor efficiency (quantity) variance is:
1. $5,640 favorable
2. $4,500 favorable
3. $4,440 favorable
4. $1,200 favorable
5. $1,140 favorable
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