Question

Flapjack Corporation had 7,680 actual direct labor hours at an actual rate of $12.45 per hour. Original production had been budgeted for 1,100 units, but only 960 units were actually produced. Labor standards were 7.2 hours per completed unit at a standard rate of $13.00 per hour. Round your answer to the nearest cent. The direct labor time variance is $4,208.64 unfavorable $4,208.64 favorable $9,984.00 unfavorable $9,984.00 favorable

Answer 1

Labour time (efficiency) variance = $9,984 unfavorable

Step-by-step explanation:

The labour time variance is the dollar value of the difference between the standard time allowed for the actual output produced and the actual time used.

Hours

Standard hours ( 960 units × 7.2 hours ) = 6,912

Actual hours 7,680

Time variance 768 Unfavorable

× standard labour rate × $13

Variance $9,984 Unfavorable