The direct-labor efficiency variance is:
A)$7,000F.
B)$7,000U.
C)$7,100F.
D)$7,100U.
E)None of thesE.

Question

Quizplus · Accepted Answer

The direct-labor efficiency variance is calculated as follows:
Actual hours worked - Standard hours allowed x Standard rate per hour
= 22,000 - (1,100 x 18)
= 22,000 - 19,800
= $2,200 U
Since the actual hours worked were less than the standard hours allowed, the variance is unfavorable. Therefore, the correct answer is B) $7,000U.

The Direct-Labor Efficiency Variance Is