Young Bay Surfboards (YBS) manufactures fiberglass surfboards. The standards include using 10 hours of direct...
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Accounting
Young Bay Surfboards (YBS) manufactures fiberglass surfboards. The standards include using 10 hours of direct labor per board. July budgeted to complete 550 boards and budgeted $157,300 for direct labor cost, which means they budgeted a direct labor cost per board of $286. Following are additional data for the month of July:
Actual units completed 530 boards
Actual direct labor cost $ 154,780
Direct labor efficiency variance $ 4,290 U
a. The unfavorable direct labor efficiency variance indicates that YBS used more direct labor hours than they should have used for actual output. How many more hours did they actually use compared to the number of hours they should have used for actual output?
b. Compute the actual amount paid per hour for direct labor.
c. The manager of YBS hired less experienced laborers and a lower price and expected these laborers to be less efficient. Overall the manager expected the tradeoff to work to the benefit of the company. Did the tradeoff work to the benefit of the company? Why or why not?
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