XYZ Company makes one product and has calculated the following amounts for direct labor: AH x AR = $84,000; AH x SR = $83,000; SH x SR = $85,000. Compute the labor efficiency variance.Multiple choice question.$2,000 U$1,000 U$1,000 F$2,000 F

The labor efficiency variance is calculated as follows:

Labor Efficiency Variance = (Standard Hours - Actual Hours) x Standard Rate

From the given information, we can derive the following:

AH x AR = $84,000 (Actual Hours x Actual Rate) AH x SR =$83,000 (Actual Hours x Standard Rate) SH x SR = $85,000 (Standard Hours x Standard Rate)

We can find the Actual Hours (AH) by dividing the Actual Cost by the Actual Rate. Since we don't have the Actual Rate, we can use the Standard Rate (SR) instead. We can find the SR by dividing the Actual Cost at Standard Rate (AH x SR) by the Actual Hours (AH).

So, SR = AH x SR / AH = $83,000 / AH

We can substitute SR in the equation SH x SR = $85,000 to find the Standard Hours (SH).

SH = $85,000 / SR

Now, we can calculate the Labor Efficiency Variance:

Labor Efficiency Variance = (SH - AH) x SR

If the variance is positive, it is favorable (F), and if it is negative, it is unfavorable (U).

Without the actual numerical values of AH, AR, and SR, we cannot compute the exact labor efficiency variance. However, we can see that the Actual Hours at Standard Rate (AH x SR) is less than the Standard Hours at Standard Rate (SH x SR), which indicates an unfavorable variance. Therefore, the answer is either $1,000 U or$2,000 U.

To determine which one, we need to calculate the difference between SH x SR and AH x SR:

$85,000 -$83,000 = $2,000

So, the labor efficiency variance is $2,000 Unfavorable. The answer is$2,000 U.

The labor efficiency variance is calculated as follows:

Labor Efficiency Variance = (Standard Hours - Actual Hours) x Standard Rate

From the given information, we can derive the following:

AH x AR = $84,000 (Actual Hours x Actual Rate) AH x SR =$83,000 (Actual Hours x Standard Rate) SH x SR = $85,000 (Standard Hours x Standard Rate)

We can find the Actual Hours (AH) by dividing the Actual Cost by the Actual Rate. Since we don't have the Actual Rate, we can use the Standard Rate (SR) instead. We can find the SR by dividing the Actual Cost at Standard Rate (AH x SR) by the Actual Hours (AH).

So, SR = AH x SR / AH = $83,000 / AH

We can substitute SR in the equation SH x SR = $85,000 to find the Standard Hours (SH).

SH = $85,000 / SR

Now, we can calculate the Labor Efficiency Variance:

Labor Efficiency Variance = (SH - AH) x SR

If the variance is positive, it is favorable (F), and if it is negative, it is unfavorable (U).

Without the actual numerical values of AH, AR, and SR, we cannot compute the exact labor efficiency variance. However, we can see that the Actual Hours at Standard Rate (AH x SR) is less than the Standard Hours at Standard Rate (SH x SR), which indicates an unfavorable variance. Therefore, the answer is either $1,000 U or$2,000 U.

To determine which one, we need to calculate the difference between SH x SR and AH x SR:

$85,000 -$83,000 = $2,000

So, the labor efficiency variance is $2,000 Unfavorable. The answer is$2,000 U.