Midgley Corporation makes a product whose direct labor stand

Midgley Corporation makes a product whose direct labor standards are 0.9 hours per unit and $36 per hour. In April the company produced 7,750 units using 6,475 direct labor-hours. The actual direct labor cost was $135,975. The labor efficiency variance for April is: rev: 11_22_2014_QC_59767 $18,000 U $18,000 F $115,125 F $115,125 U

Solution

(Actual hours - Standard hours) x Standard rate = Labor efficiency variance

(6,475 direct labor-hours- company produced 7,750 units*0.9)*$36=$18,000 U