Hassock Corp.produces woven wall hangings.It takes 2 hours of direct labor to produce a single wall hanging.Bartels' standard labor cost is $12 per hour.During August,Bartels produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376.What is Bartels' labor efficiency variance for August?

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Quizplus · Accepted Answer

The labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard Hours for 10,000 units = 10,000 x 2 = 20,000 hours. Actual Hours = 21,040. Standard Rate = $12. Variance = (21,040 - 20,000) x $12 = 1,040 x $12 = $12,480 unfavorable.