If the standard to produce a given amount of product is 600 direct labor hours at $15 and the actual is 500 hours at $17, the time variance is $1,700 unfavorable.

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Quizplus · Accepted Answer

The question is asking for the time variance, not the cost variance. The cost variance can be calculated using the formula (actual hours x actual rate) - (standard hours x standard rate), which would result in a $900 unfavorable variance ((500 x $17) - (600 x $15) = $8,500 - $9,400 = $900). However, to calculate the time variance, we need to compare the actual hours to the standard hours, which would be 100 hours favorable ((500 - 600) x $15 = -$1,500). Therefore, the correct answer is B, false.

If the Standard to Produce a Given Amount of Product