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Discover Motor Company uses a standard cost system to collect costs related to the production of its toothpick motors. The direct labor standard for each toothpick motor is 1.25 hours at a standard cost of $9.50 per hour.

During the month of May, Discover's toothpick motor production used 5,900 direct labor-hours at a total direct labor cost of $54,575. This resulted in production of 4,800 toothpick motors for May. What is Discover's labor efficiency variance for the month of May?

A) $950 favorable

B) $1,475 favorable

C) $8,975 unfavorable

D) $10,450 unfavorable

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M955941

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