Question

In producing jelly beans, 1,000 hours of direct labor were used at a rate of $12 per hour. The standard was 1,100 at $12.25 per hour. What is the direct labor efficiency variance

Answer 1

Efficiency variance = $1,225 favorable

Step-by-step explanation:

Labour efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours allowed for same multiplied by the standard labour rate .

It occurs as result of workers working faster or slower than expected (i.e standard hour )

Hours

standard hours 1, 100

Actual hours 1,000

efficiency varainec in Labour hour 100 favorable

Standard labour rate × $12.25f

Efficiency variance $1,225 favorable

Efficiency variance = $1,225