Direct Labor Efficiency Variance Assignment

Assume the following set of facts for questions 5-6.

Puig corp. has developed some standard costs for the year based on a capacity of 180,000 direct labor hours as follows (Puig uses direct labor hours as a base for overhead):

Cost per unit:

direct materials        4 pounds @ $7 = $28

fixed overhead          2 hours @ $4 =   8

During the year, 90,000 units were scheduled for production; however, only 80,000 units were actually produced. The following data relate to the year:

Direct labor efficiency variance of $20,000 u.

Actual direct labor hours were 165,000.

The denominator level of volume was 180,000 direct labor    hours.

____ 5. The standard wage per hour for direct labor is:

(a) $ 6

(b) $ 5

(c) $ 4

(d) $ 3

(e) none of the above, the correct answer is ________.

___ 6. The production volume variance for the year is:

(a) $60,000 f

(b) $60,000 u

(c) $30,000 u

(d) $30,000 f

(e) none of the above, the correct answer is _________..

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