The following data relate to direct labor costs for the current period of Executive Inc.: $\begin{array}{lrr}
\text {6,000 hours at $ \$12.00 $ } & \text { Standard costs } \
\text {7,500 hours at $ \$ 11.60 $ } & \text { Actual costs } \
\end{array}$

Refer to the information provided for Executive Inc. What is the direct labor time variance?
A) $17,400 favorable
B) $17,400 unfavorable
C) $18,000 favorable
D) $18,000 unfavorable

Question

The following data relate to direct labor costs for the current period of Executive Inc.: $\begin{array}{lrr}
  \text {6,000 hours at $ \$12.00 $  } & \text { Standard costs } \
 \text {7,500 hours at $ \$ 11.60 $ } & \text { Actual costs } \
\end{array}$

Refer to the information provided for Executive Inc. What is the direct labor time variance?
A) $17,400 favorable
B) $17,400 unfavorable
C) $18,000 favorable
D) $18,000 unfavorable

Quizplus · Accepted Answer

The direct labor time variance is calculated as (Actual hours - Standard hours) x Standard rate. Here, (7,500 - 6,000) x $12 = $18,000 unfavorable.

The Following Data Relate to Direct Labor Costs for the Current