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Annapolis Company completes job #601 which has a standard of 580 labor hours at a standard...

Annapolis Company completes job #601 which has a standard of 580 labor hours at a standard rate of $19.70 per hour. The job was completed in 600 hours and the average actual labor rate was $18.90 per hour. What is the labor efficiency (quantity) variance? A negative number indicates an favorable variance and a positive number indicates an unfavorable variance.

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Expert Solution

Labor E variance = (Act. Hours – Std. hours) × Std. rate

                              = (600 – 580) × $19.70

                              = 20 × 19.70

                              = $394 (Unfavorable)

Since actual labor hour (600) is higher than the standard labor hour (580), the efficiency variance is unfavorable.

ekkarill92 answered 2 years ago
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