Question

The Flapjack Corporation had 7,872 actual direct labor hours at an actual rate of $12.21 per hour. Original production has been budgeted for 1,100 units, but only 984 units were actually produced. Labor standards were 7.1 hours per completed unit at a standard rate of $13.00 per hour. Round your answer to the nearest cent. The labor time variance is:

Answer 1

$11,512.80 unfavorable

Step-by-step explanation:

The computation of the labor time variance is shown below:

= (Standard Hours allowed - Actual hours) × Standard rate

= (984 units × 7.1 hour - 7,872 hours) × $13

= (6,986.40 hours - 7,872 hours) × $13

= 885.6 hours × $13

= $11,512.80 unfavorable

Simply we subtract the standard hours allowed from the actual hours and then multiplied it with the standard rate