A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21.If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?
A) $84,000
B) $88,000
C) $100,000
D) $105,000
E) $110,000

Question

Quizplus · Accepted Answer

$22 (actual hours - 5,000 hours) = $22,000 F
The variance is favorable, therefore:
5,000 hours - actual hours = 1,000 hours; actual hours = 4,000
Actual cost = (4,000 hrs.)($21/hr.) = $84,000

A Company Had a $22,000 Favorable Direct Labor Efficiency Variance