Answer (D) is correct . The direct labor efficiency variance equals the difference between standard and actual hours times the standard rate. Hence, the variance is $54,000 unfavorable {[(22,000 units × 4 standard hours per unit) – 94,000 hours] × $9}. The variance is unfavorable because the actual hours exceeded the standard hours.
Answer (A) is incorrect because The variance of $108,000 favorable is based on the difference between standard and capacity hours.
Answer (B) is incorrect because The variance of $120,000 favorable is based on the actual rate and the difference between standard hours and capacity.
Answer (C) is incorrect because The variance of $60,000 favorable is based on the actual rate and the difference between actual hours and capacity.
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Water Control’s direct labor efficiency variance for November was
