Manufacturing
Direct Labor Efficiency Variance
Recording the extra hours worked compared to the standard time allowed for a job.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work-in-Process (at Standard) | Asset (+) | 5,000.00 | - |
| Labor Efficiency Variance (Unfavorable) | Expense (+) | 500.00 | - |
| Labor Applied (Actual Hours) | Clearing | - | 5,500.00 |
💡 Accountant's Note
This is a key KPI for factory managers. It shows how much money was lost because production took longer than it should have.
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