Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $55,500 favorable; direct labor efficiency variance = $74,000 unfavorable. Sheldon allows 4 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 20% more direct labor hours than the standard allowed for the output achieved.
What was the direct labor flexible-budget (FB) variance for the month (rounded to the nearest dollar)?
$18,500 unfavorable
Direct labor flexible-budget (FB) variance = total direct labor standard cost variance = labor rate variance + labor efficiency variance = $55,500F (given) + $74,000U (given) = $18,500U (rounded to nearest dollar).
Business
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