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8 August, 08:30

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

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  1. 8 August, 11:54
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    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
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