Question

Flapjack Corporation had 7,600 actual direct labor hours at an actual rate of $12.41 per hour. Original production had been budgeted for 1,100 units, but only 950 units were actually produced. Labor standards were 7.0 hours per completed unit at a standard rate of $13.00 per hour. The direct labor time variance is

Answer 1

-$12,350 Unfavorable

Explanation:

The computation of direct labor variance is shown below:

Labor time variance = (Standard hours - Actual hours) × standard rate

= (950 × 7.0 - 7,600) × $13

= (6,650 - 7,600) × $13

= -950 × $13

= -$12,350 Unfavorable

Therefore for computing the direct labor variance we simply applied the above formula by considering the given information