Question

odson Company manufactures a product with a standard direct labor cost of 2.3 hours of labor per unit at $10.60 per hour. Last month, 170 units were produced using 90 hours at $11.60 per hour. What was the company's labor quantity variance

Answer 1

Direct labor time (efficiency) variance= $3,190.6 favorable

Step-by-step explanation:

To calculate the direct labor quantity variance, we need to use the following formula:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (391 - 90)*10.6

Direct labor time (efficiency) variance= $3,190.6 favorable

Standard quantity= 2.3*170= 391