Question

MetaPro Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. MetaPro has budgeted three hours of direct labor per​ connector, at a standard cost of $ 16 per hour. During​ August, technicians actually worked 195 hours completing 71 connectors. All 71 connectors actually produced were sold. MetaPro paid the technicians $ 16.80 per hour.What is MetaPro's direct labor efficiency variance for August?

Answer 1

$304 Favorable

Step-by-step explanation:

The computation of direct labor efficiency variance is shown below:-

Direct Labor efficiency Variance = (Standard Labor Hour - Actual Labor Hour) × Standard Rate

= ((71 × 3) - 195)) × $16

= (214 - 195) × $16

= 19 × $16

= $304 Favorable

Therefore for computing the direct labor efficiency variance we simply applied the above formula.