Rickett Corporation had a favorable direct-labor eﬃciency variance of $6,000 for the period just ended.The actual wage rate was $0.50 more than the standard rate of $12.00.If the company's standard hours allowed for actual production totaled 9,500, how many hours did the ﬁrm actually work?
A)9,000.
B)9,020.
C)9,980.
D)10,000.
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

The direct-labor efficiency variance is calculated as (Standard Hours - Actual Hours) x Standard Rate. Given a favorable variance of $6,000 and a standard rate of $12, the difference in hours is 500 hours. Therefore, the actual hours worked is 9,500 - 500 = 9,000 hours.

Rickett Corporation Had a Favorable Direct-Labor Eﬃciency Variance of $6,000