Which cost accounting variance measures the difference between standard direct labor hours allowed for actual output and actual labor hours worked?

Explanation

• Direct Labor Efficiency Variance formula: $text{Efficiency Variance} = (text{Standard Hours} – text{Actual Hours}) times text{Standard Rate}$.
• A favorable variance occurs when workers complete output in fewer hours than standard benchmarks allow.
• Labor Rate Variance evaluates differences between standard hourly rates and actual wage rates paid.