The following information describes a company's usage of direct labor in a recent period:

- How much is the direct labor efficiency variance?

Question

The following information describes a company's usage of direct labor in a recent period:

- How much is the direct labor efficiency variance?

Quizplus · Accepted Answer

The direct labor efficiency variance is calculated as the difference between the actual hours worked and the standard hours allowed for the actual production, multiplied by the standard rate per hour. If the actual hours are greater than the standard hours, the variance is unfavorable. If the actual hours are less than the standard hours, the variance is favorable. Without specific numbers provided in the question, it's not possible to calculate the exact figure or determine the direction (favorable or unfavorable) of the variance. However, based on the options given, if we assume the correct answer is among them, "D) $36,000 unfavorable" would indicate that the actual hours worked were more than the standard hours allowed, costing the company an additional $36,000.

The Following Information Describes a Company's Usage of Direct Labor