Harrison Inc.has computed direct labor standards for the manufacture of its product to be 4 hours of labor per product at a cost of $15 per hour.During March,Harrison produced 45 products in 190 hours and incurred direct labor costs of $2,720.Harrison's direct labor efficiency variance was
A)$150 (F).
B)$130 (U).
C)$150 (U).
D)$130 (F).

Question

Quizplus · Accepted Answer

To find the direct labor efficiency variance, we need to first calculate the standard hours allowed for the actual production.

Standard hours allowed = Standard labor hour per unit x Actual units produced
= 4 x 45
= 180 hours

Now, we can calculate the direct labor efficiency variance as:

Direct labor efficiency variance = Standard hours allowed - Actual hours worked x Standard labor rate

= 180 - 190 x $15
= $150 (U)

Therefore, the correct choice is C.