Question

Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $22.50 per hour. During July, Whitman paid $189,600 to employees for 8,900 hours worked. 4,760 units were produced during July. What is the direct labor efficiency variance

Answer 1

the direct labor efficiency variance is $13,950 favorable

Step-by-step explanation:

The computation of the direct labor efficiency variance is shown below:

= (units produced × required hours per unit -hours) × standard wage rate

= (4,760 units × 2 hours - 8,900 hours) ×$22.50

= $13,950 favorable

hence, the direct labor efficiency variance is $13,950 favorable

we simply applied the above formula