Reference: 21_06
The following information describes a company's use of direct labor in a recent period:
$\begin{array}{llr}
\text { Actual hours used} &45,000\
\text { Actual rate per hour} &\$15\
\text { Standard rate per hour} &\$14\
\text { Standard hours for units produced} &47,000\
\end{array}$

-The direct labor efficiency variance is:
A) $28,000 unfavorable
B) $28,000 favorable
C) $45,000 unfavorable
D) $45,000 favorable
E) $17,000 unfavorable

Question

Reference: 21_06
The following information describes a company's use of direct labor in a recent period:
 $\begin{array}{llr}
  \text {  Actual hours used} &45,000\
 \text {  Actual rate per hour} &\$15\
 \text {  Standard rate per hour} &\$14\
 \text {  Standard hours for units produced} &47,000\
\end{array}$

-The direct labor efficiency variance is:
A) $28,000 unfavorable
B) $28,000 favorable
C) $45,000 unfavorable
D) $45,000 favorable
E) $17,000 unfavorable

Quizplus · Accepted Answer

The direct labor efficiency variance is favorable because the actual hours used were less than the standard hours allowed for the units produced. The variance is calculated as follows:Direct labor efficiency variance = (Standard hours - Actual hours) x Standard rate= (47,000 - 45,000) x $14= 2,000 x $14= $28,000 favorable

Reference: 21_06 the Following Information Describes a Company's Use of Direct

Reference: 21_06
the Following Information Describes a Company's Use of Direct