What is the direct labor efficiency variance for 5,500 units produced using 3,000 labor hours with a standard time of 0.5 hours per unit?

To calculate the direct labor efficiency variance, we need to assess how much of the actual labor hours used differ from the standard labor hours expected for the output produced. The formula for the direct labor efficiency variance is:

Direct Labor Efficiency Variance = (Actual Hours - Standard Hours) × Standard Rate

1. Determine the Standard Hours: The standard time is given as 0.5 hours per unit. If 5,500 units were produced, the total standard hours should be calculated as follows:

   Standard Hours = Standard Time per Unit × Total Units Produced = 0.5 hours/unit × 5,500 units = 2,750 hours

2. Identify Actual Hours: The actual hours used for production are provided as 3,000 hours.

3. Calculate the Difference: Now, we find the difference between actual hours and standard hours:

   Actual Hours - Standard Hours = 3,000 hours - 2,750 hours = 250 hours

4. Calculate the Variance: Assuming the standard labor rate is not provided, it would still be embedded within the variance calculation. However, for the purpose of variance calculation, we focus only on the difference in