The following data relate to direct labor costs for the current period: Standard costs
7,500 hours at $11.70
Actual costs
6,000 hours at $12.00
The direct labor time variance is
A)$18,000 favorable
B)$18,000 unfavorable
C)$17,550 unfavorable
D)$17,550 favorable

Question

Quizplus · Accepted Answer

The direct labor time variance is calculated as (Standard Hours - Actual Hours) * Standard Rate. Here, it is (7,500 - 6,000) * $11.70 = 1,500 * $11.70 = $17,550 favorable, because actual hours worked were less than the standard hours allowed.

The Following Data Relate to Direct Labor Costs for the Current