Quinton's Salon cuts men's hair. Labor standards for each cut are as follows: The following data relates to the haircuts during the month of October:
What is the labor efficiency variance for the month of October?

Question

Quinton's Salon cuts men's hair. Labor standards for each cut are as follows:  The following data relates to the haircuts during the month of October:
 What is the labor efficiency variance for the month of October?

Quizplus · Accepted Answer

To calculate the labor efficiency variance, we need to determine the difference between the actual hours worked and the standard hours allowed for the actual output. 
Standard hours allowed = actual output x standard hours per unit 
In this case, the actual output is 800 haircuts, and the standard hours per unit is 0.25 (15 minutes per haircut). 
So, standard hours allowed = 800 x 0.25 = 200 hours 
Actual hours worked = 840 hours 
So, the labor efficiency variance = (standard hours allowed - actual hours worked) x standard rate per hour 
= (200 - 840) x $0.50 
= -$320, which means $320 unfavorable 
Hence, the correct answer is option C) $100 favorable, implying that the actual hours worked were fewer than the standard hours allowed, resulting in a favorable variance.

Quinton's Salon Cuts Men's Hair