If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the time variance was $1,500 favorable.

Question

Quizplus · Accepted Answer

The time variance is calculated by multiplying the difference between the actual hours and standard hours by the standard rate per hour. In this case, the time variance would be calculated as (600-500) x $15 = $1,500 unfavorable, not favorable.

If the Standard to Produce a Given Amount of Product