Final answer:
The calculation shows that the time variance is actually $1,000 favorable, not $1,500 unfavorable, because the actual cost of labor ($7,500) was less than the standard cost for the actual hours worked ($8,500). Therefore, the statement in the question is false.
Step-by-step explanation:
To determine whether the time variance of $1,500 is unfavorable or not, we must calculate the difference between the standard labor cost for the actual hours worked and the actual labor cost. The standard cost for the actual hours worked (500 hours) at the standard rate ($17) would be 500 hours * $17/hour = $8,500. The actual cost for these hours at the actual rate ($15) is 500 hours * $15/hour = $7,500. The time variance is found by subtracting the actual cost from the standard cost: $8,500 - $7,500 = $1,000.
Therefore, the time variance is not $1,500, but rather it is $1,000. Since the actual cost is less than the standard cost, the variance is favorable, not unfavorable. In this case, the company spent less on labor than it had anticipated for the actual hours worked, which is a positive outcome for the company.
In conclusion, the statement that the time variance was $1,500 unfavorable is false.