Billy Bob Subs has the following standard cost to produce a king size party sub sandwich.
Direct materials = 4 pounds @ $3.00 per pound = $12.00 per sub
Direct labor = 1/2 hour @ $8.00 per hour = $4.00 per sub
During December, the company produced 1,000 party subs, bought 4,300 pounds and used 4,100 pounds of meat at $3.20 per pound, and used 490 hours of labor at a total cost of $4,018.How much is the direct labor efficiency variance?
A)$80 favorable
B)$18 unfavorable
C)$98 unfavorable
D)$178 unfavorable

Question

Quizplus · Accepted Answer

The direct labor efficiency variance is calculated as (Actual Hours - Standard Hours) x Standard Rate. Standard hours for 1,000 subs = 1,000 x 0.5 = 500 hours. Actual hours = 490. Standard rate = $8.00. Variance = (490 - 500) x $8 = -10 x $8 = $80 favorable.

Billy Bob Subs Has the Following Standard Cost to Produce