QRS Limited Uses a Standard Costing System for All Its

Multiple Choice

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product E. The standard direct labour hours for one unit of Product E are 3 hours at £11 per direct labour hour. Budgeted production of Product E is 4,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,950 units of Product E. Total direct labour cost for the year was £132,000 with direct labour hours paid at a rate of £12.00 per hour. What is the direct labour efficiency variance for Product E for the financial year ended 31 October 2019?

A) £Nil
B) £1,650 unfavourable
C) £9,350 Favourable
D) £11,000 Unfavourable