Direct labor efficiency variance = $6,100 F.
Given that
Standard labor-hours per unit of output 8.5 hours
Standard labor rate $12.30 per hour
Standard labor hours allowed 6,800 hours (800 units * 8.5 hours allowed)
The following data pertain to operations concerning the product for the last month:
Actual hours worked 6,300 hours
Actual total labor cost $74,970
Actual output 800 units
We can determine the labor efficiency variance using the following equation:
1. Direct labor efficiency variance = (Standard hours allowed - Actual labor hours) * Standard rate
2. Direct labor efficiency variance = (6,800 hours - 6,300 hours) * $12.20
3. Direct labor efficiency variance = $6,100 F
The variance is favorable as the actual labor hours used are less than the standard hours allowed.
Hence the answer is Direct labor efficiency variance = $6,100 F.
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