Question

Flapjack Corporation had 7,824 actual direct labor hours at an actual rate of $12.03 per hour. Original production had been budgeted for 1,100 units, but only 978 units were actually produced. Labor standards were 7.1 hours per completed unit at a standard rate of $12.75 per hour. Round your answer to the nearest cent. The direct labor time variance is a.$5,625.46 unfavorable b.$5,625.46 favorable c.$11,222.55 unfavorable d.$11,222.55 favorable

Answer 1

$11,220 Unfavorable

Step-by-step explanation:

As we know that:

Labor Time Variance = Standard rate per hour * (Standard time for actual output - Actual time worked)

Here,

Standard rate per hour= 12.75$

Standard time for actual units = 978 units * 7.1 hour per unit = 6,944 Hours

Actual hours worked are 7,824 hours

By putting the above values, we have:

Labour time variance = $12.75 * (6,944 - 7,824) = $11,220 Unfavorable