The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows:
Variable cost @ $2 per hour
Total variable cost,$18,000
Fixed cost @ $0.80 per hour
Total fixed cost,$8,000
-The amount of the direct labor time variance is
A)$1,200 favorable.
B)$1,140 unfavorable.
C)$1,200 unfavorable.
D)$1,140 favorable.

Question

The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows:
  Variable cost @ $2 per hour
Total variable cost,$18,000
Fixed cost @ $0.80 per hour
Total fixed cost,$8,000
-The amount of the direct labor time variance is
A)$1,200 favorable. 
B)$1,140 unfavorable. 
C)$1,200 unfavorable. 
D)$1,140 favorable.

Quizplus · Accepted Answer

The direct labor time variance is the difference between the actual direct labor hours and the standard direct labor hours multiplied by the standard direct labor rate. In this case, the actual direct labor hours are 5,000 hours, the standard direct labor hours are 4,800 hours, and the standard direct labor rate is $24 per hour. Therefore, the direct labor time variance is (5,000 hours - 4,800 hours) x $24 per hour = $1,200 favorable.

The Standard Costs and Actual Costs for Direct Materials,direct Labor,and