The following information describes a company's usage of direct labor in a recent period.The direct labor efficiency variance is:
A)$29,000 unfavorable.
B)$29,000 favorable.
C)$22,500 unfavorable.
D)$52,500 favorable.
E)$52,500 unfavorablE.

Question

The following information describes a company's usage of direct labor in a recent period.The direct labor efficiency variance is: 
A)$29,000 unfavorable. 
B)$29,000 favorable. 
C)$22,500 unfavorable. 
D)$52,500 favorable. 
E)$52,500 unfavorablE.

Quizplus · Accepted Answer

Since the direct labor efficiency variance measures the difference between the actual hours worked and the standard hours allowed for the actual output achieved, a favorable variance means that the actual hours worked were less than the standard hours allowed. Therefore, B is the correct answer, indicating that the actual hours worked were less than the standard hours allowed by $29,000.

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