Bower Company produced 4,000 units of product

Accounting Jun 07, 2021

Bower Company produced 4,000 units of product. The direct labor standard quantity is 0.5 hours per unit. The standard labor rate is $12 per hour. Actual direct labor for the period was $22,000 (2,200 hours ×$10 per hour). The direct labor time variance is:

A. 200 hours unfavorable

B. $2,000 unfavorable

C. $4,000 favorable

D. $2,400 unfavorable

Expert Solution

Computation of Direct Labor Time Variance:

Direct Labor Time Variance = Actual Hours * Standard Rate - Standard Hours * Standard Rate

= 2200 * $12 - (4000 *0.5) * $12

= $26,400 - $24,000

Direct Labor time variance = $2400 Unfavorable

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