Lion Company’s direct labor costs for the month of January were as follow:
Actual total direct labor hours 20,000
Standard total direct labor hours 21,000
Direct labor rate varianceunfavorable $3,000
Total direct labor cost $126,000
What was Lion’s direct labor efficiency variance?
We know the following:
Actual Hours AH = 20,000
Actual Rate AR = $126,000 / 20,000 = $6.30
Standard Hours SH = 21,000
So we need to do some …
This provides an example of determining direct labor efficiency variance.