Miguez Corporation Makes a Product with the Following Standard Costs

Multiple Choice

Miguez Corporation makes a product with the following standard costs: The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor efficiency variance for September is:

A) $1,540 Favorable
B) $1,687 Unfavorable
C) $1,687 Favorable
D) $1,540 Unfavorable