Carlton Corporation Carlton Corporation Produces and Sells Faux-Leather Handbags

Multiple Choice

Carlton Corporation Carlton Corporation produces and sells faux-leather handbags. In the current year, the company budgeted for the production and sale of 1,000 handbags; however, 900 handbags were actually produced and sold. Each bag has a standard requiring two yards of material at a cost of $4.00 per yard and 1 hour of assembly time at a cost of $9.50 per hour. Actual costs for the production of 900 bags were $7,215 for materials (1,850 yards purchased and used @ $3.90 per yard) and $10,125 for labor (1,125 hours @ $9.00 per hour) .
Refer to the Carlton Corporation information above. Carlton's direct labor efficiency variance is:

A) $ 562.50 F.
B) $2,137.50 U.
C) $1,187.50 U.
D) $2,025.00 F.