Direct labor efficiency variance problem: If the standard hours for actual production are 6,000 and actual hours used are 6,250, with a standard rate of $12 per hour, the efficiency variance is?

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Multiple Choice

Direct labor efficiency variance problem: If the standard hours for actual production are 6,000 and actual hours used are 6,250, with a standard rate of $12 per hour, the efficiency variance is?

Direct labor efficiency variance shows whether the actual hours used match the standard hours allowed for the actual output, valued at the standard rate. Here, the standard hours for the actual production are 6,000, but 6,250 hours were actually used. That means 250 more hours were needed than planned. Using the standard rate of $12 per hour, the variance is 250 × 12 = $3,000. Because more hours were required, this variance is unfavorable, i.e., $3,000 Unfavorable. If actual hours had been fewer than standard, the variance would be favorable.

Direct labor efficiency variance problem: If the standard hours for actual production are 6,000 and actual hours used are 6,250, with a standard rate of $12 per hour, the efficiency variance is?

Prepare for the Accounting SmartBook Test. Practice with tailored questions and helpful hints. Analyze comprehensive explanations for a deep understanding. Ace your exam with confidence!

Direct labor efficiency variance problem: If the standard hours for actual production are 6,000 and actual hours used are 6,250, with a standard rate of $12 per hour, the efficiency variance is?

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