Bread Company has developed the following standards for one of its products. The company records materials price variances at the time of purchase.
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The direct labor efficiency variance is
A) $8,000 favorable.
B) $8,000 unfavorable.
C) $20,000 unfavorable.
D) $20,000 favorable.

Question

Bread Company has developed the following standards for one of its products.  The company records materials price variances at the time of purchase.
-
The direct labor efficiency variance is
A) $8,000 favorable. 
B) $8,000 unfavorable. 
C) $20,000 unfavorable. 
D) $20,000 favorable.

Quizplus · Accepted Answer

The direct labor efficiency variance is calculated as (Actual hours - Standard hours) x Standard rate. If the actual hours are less than the standard hours, the variance is favorable.

Bread Company Has Developed the Following Standards for One of Its