The following data relate to direct labor costs for the current period:Standard costs7,500 hours at $11.70Actual costs6,000 hours at $12.00What is the direct labor time variance?
A) $18,000 favorable
B) $18,000 unfavorable
C) $17,550 unfavorable
D) $17,550 favorable

Question

The following data relate to direct labor costs for the current period:Standard costs7,500 hours at $11.70Actual costs6,000 hours at $12.00​What is the direct labor time variance?
A) $18,000 favorable
B) $18,000 unfavorable
C) $17,550 unfavorable
D) $17,550 favorable

Quizplus · Accepted Answer

Direct Labor Time Variance = (Actual Hours - Standard Hours) x Standard Hourly Rate
= (6,000 - 7,500) x $11.70
= 1,500 x $11.70
= $17,550 unfavorable

Therefore, the answer is D, $17,550 favorable is incorrect as the variance is unfavorable. A and B are also incorrect as they provide an amount but do not indicate whether it is favorable or unfavorable.

The Following Data Relate to Direct Labor Costs for the Current