The following data relate to direct labor costs for February: What is the direct labor time variance?
A) $7,700 favorable
B) $7,700 unfavorable
C) $11,200 unfavorable
D) $11,200 favorable

Question

The following data relate to direct labor costs for February:  What is the direct labor time variance?
A) $7,700 favorable 
B) $7,700 unfavorable 
C) $11,200 unfavorable 
D) $11,200 favorable

Quizplus · Accepted Answer

Direct labor time variance = (Actual Hours - Standard Hours) x Standard Rate
= (30,400 - 25,600) x $0.44
= $2,112 unfavorable for efficiency variance
+ ($15 x 640) favorable for rate variance
= $9,600 favorable for rate variance
Therefore, the total direct labor time variance is $11,200 unfavorable.

The Following Data Relate to Direct Labor Costs for February