The following data relate to direct labor costs for the current period:

What is the direct labor time variance?
A)$23,000 unfavorable
B)$23,500 unfavorable
C)$23,500 favorable
D)$23,000 favorable

Question

The following data relate to direct labor costs for the current period:

What is the direct labor time variance?
A)$23,000 unfavorable 
B)$23,500 unfavorable 
C)$23,500 favorable 
D)$23,000 favorable

Quizplus · Accepted Answer

The direct labor time variance is calculated as follows: Actual Hours - (Standard Hours per Unit × Actual Output).

Actual Hours = 247,000 
Standard Hours per Unit = 2 
Actual Output = 120,000 units

Therefore, Direct Labor Time Variance = 247,000 - (2 × 120,000) = $7,000 Favorable.

The only option that reflects a favorable variance is option C.

The Following Data Relate to Direct Labor Costs for the Current