The following data relate to direct labor costs for February:
Actual costs
7,700 hours at $14.00
Standard costs
7,000 hours at $16.00
-The direct labor time variance is
A)$7,700 favorable
B)$7,700 unfavorable
C)$11,200 unfavorable
D)$11,200 favorable

Question

Quizplus · Accepted Answer

The direct labor time variance is unfavorable because the actual hours worked (7,700) exceeded the standard hours allowed (7,000). The unfavorable variance is calculated as follows:Unfavorable variance = (Actual hours - Standard hours) x Standard rate= (7,700 - 7,000) x $16= $11,200

The Following Data Relate to Direct Labor Costs for February