Question

Collins Co. had an unfavorable direct-labor efficiency variance of $5,250. The actual wage rate was $0.50 more than the standard rate of $10.00. If the company's standard direct-labor hours allowed for actual production totaled 9,000 hours, compute the actual direct-labor hours worked.

Answer 1

Ans.	*An unfavorable direct labor efficiency variance shows that the standard hours allowed
	are less than the actual labor hours used.
	Direct labor efficiency variance = (Standard hours - Actual hours) * Standard rate
		-$5,250 = (9,000 - Actual hours used) * $10
		-$5,250 / $10 = 9,000 - Actual hours used
		-525 = 9,000 - Actual hours used
		Actual hours worked   =   9,000 + 525
		Actual hours worked   =   9,525