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Hi, I have completed the Mock exam here but i think one of the answers is incorrect.
The question is:
Company has budgeted labour cost of $180,000 for the production of 30,000 units per month. Each unit is budgeted to take 3 hours of labour. Actual cost is $160,000 for 28,000 and 85,000 hours were worked.
What is the labour efficiency variance?
I have got the answer to be $2,000 adverse. But apparently it is $2,000 favourable.
For me Actual hours were 85,000. It should have take 84,000 so it should be adverse, no?
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