Question

During July, Whitman paid $189,600 to employees for 8,900 hours worked. 4,760 units were produced during July. What is the direct labor efficiency variance

Answer 1

Answer and Explanation:

The computation of the  direct labor efficiency variance is shown below;

= Standard Rate × (Standard Hours - Actual Hours)

= $22.50 × (4,760 Units × 2 hours per unit - 8,900)

= $13,950 Favourable

Hence, the direct labor efficiency variance is $13,950 favorable

We simply applied the above formula so that the correct amount could come