Choice "D" is correct. The direct labor usage (efficiency) variance is computed as follows:
Direct labor usage variance× standard rate |
Direct labor usage variance× .50 hour) − 3,000 hours) × $15 per hour |
Direct labor usage variance$30,000 favorable |
The usage variance is favorable because the actual hours were less than the standard hours |
Choice "b" is incorrect. It is unclear how the $25,000 variance can be calculated in this question, but $25,000 favorable or unfavorable is certainly not correct.
Choice "c" is incorrect. It is unclear how the $25,000 variance can be calculated in this question, but $25,000 favorable or unfavorable is certainly not correct.
Choice "a" is incorrect. The variance was favorable, not unfavorable, because the actual hours were less than the standard hours.
