Asked by lauren campbell on May 05, 2024
Verified
If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual is 500 hours at $15, the time variance is $1,500 unfavorable.
Time Variance
The difference between the actual time taken to perform an activity and the expected or standard time allotted for it.
Direct Labor Hours
A measure of the total amount of time workers spend on direct production activities.
Unfavorable
A term often used in finance and accounting to describe results or variances that are worse than expected or budgeted.
- Ascertain and clarify price and quantity deviations for direct materials and labor, including their calculation and interpretation.
Verified Answer
JD
Jeyra DutrowMay 07, 2024
Final Answer :
False
Explanation :
The time variance is calculated as (Standard Hours - Actual Hours) x Standard Rate. In this case, it would be (600 - 500) x $17 = $1,700 favorable, not $1,500 unfavorable.
Learning Objectives
- Ascertain and clarify price and quantity deviations for direct materials and labor, including their calculation and interpretation.
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