10 May WHICH LABOR VARIANCE REFLECTS THE EXTRA HOURS WORKED BY MARLO’S EMPLOYEES? WAS THEIR TIMEWELL UTILIZED?
E24.6 Marlo EnterprisesMarlo Enterprises produces radon mitigation pumps. Information pertaining to the company’smonthly direct labor usage is provided below:Standard labor rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16Standard hours allowed per radon mitigation pump . . . . . . . . . . . . . . . . . . . . . . . 0.5 hoursActual pumps produced during the current month . . . . . . . . . . . . . . . . . . . . . . . . 9 000 unitsActual labor hours worked during the current month . . . . . . . . . . . . . . . . . . . . . . 3 600 hoursActual labor cost for the current month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64 800a. Compute the company’s labor rate variance.b. Compute the company’s labor efficiency variance.c. An extremely large order of radon mitigation pumps was filled during the month for exportationto Saudi Arabia. Filling this order resulted in extended hours for many of the company’s workers.Which labor variance reflects the extra hours worked by Marlo’s employees? Was their timewell utilized? Explain.
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