Question

The following data relate to direct labor costs for the current period: Standard costs 7,300 hours at $11.60 Actual costs 6,000 hours at $10.40 The direct labor time variance is a.$15,080 unfavorable b.$13,520 favorable c.$13,520 unfavorable d.$15,080 favorable

Answer 1

Answer:

d.$15,080 favorable

Explanation:

The formula and the computation of the direct labor time variance is shown below:

Direct Labor Efficiency Variance  

= (Standard Hours allowed - Actual hours) × Standard rate

where,

Standard hours allowed = 7,300 hours

Actual hours = 6,000 hours

And, the standard rate is $11.60

So, the direct labor time variance is

= (7,300 hours - 6,000 hours) × $11.60

= 1,300 hours × $11.60

= 15,080 favorable