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whitman has a direct labor standard of 2 hours per unit of output. each employee has a standard wage rate of $29.50 per hour. during july, whitman paid $189,900 to employees for 8,890 hours worked. 4,740 units were produced during july. what is the direct labor efficiency variance? multiple choice $89,760 favorable $17,405 favorable $72,355 favorable $72,355 unfavorable

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The direct labor efficiency variance is $17,405 favorable if 4740 units were produced during July.

The formula for direct labor efficiency variance can be given as follows;

direct labor efficiency variance = {standard hours allowed for production – actual hours taken} × standard rate per direct labor hour

As Whitman has a direct labor standard of 2 hours per unit of output and 4740 units were produced during July, the total standard hours for this production can be calculated as follows;

standard hours allowed = 2 × 4740

standard hours allowed = 9480 hours

Now we can calculate the direct labor efficiency variance by substituting the values of standard hours allowed and actual hours taken and standard wage rate in the formula as follows;

direct labor efficiency variance = {9480 - 8890} × 29.50

direct labor efficiency variance = 590 × 29.50

direct labor efficiency variance = $17,405

As the answer is a positive value therefore the direct labor efficiency variance is $17,405 favorable.

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