The following data relate to direct labor costs for the current period: What is the direct labor time variance?
A) $ 4,500 favorable
B) $18,000 unfavorable
C) $ 3,600 favorable
D) $17,100 favorable

Question

The following data relate to direct labor costs for the current period:  What is the direct labor time variance?
A) $ 4,500 favorable 
B) $18,000 unfavorable 
C) $ 3,600 favorable 
D) $17,100 favorable

Quizplus · Accepted Answer

To calculate the direct labor time variance, we need to use the formula:

Direct Labor Time Variance = (Actual hours - Standard hours) x Standard rate

From the given data,

Actual hours = 9,500
Standard hours = 10,000
Standard rate = $18/hour

Direct Labor Time Variance = (9,500 - 10,000) x $18/hour
= -$9,000

Since the calculated variance is negative, it means that the actual direct labor hours were less than the standard direct labor hours, which resulted in a favorable variance.

Therefore, the correct answer is D, $17,100 favorable.

The Following Data Relate to Direct Labor Costs for the Current