Operation B, in a factory, has a standard time of 15 minutes. The standard rate of pay for operational labour is 10 per hour.

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1. Operation B, in a factory, has a standard time of 15 minutes. The standard rate of pay for operational labour is £10 per hour. The budget for a period was based on carrying out the operation 350 times. It was subsequently realised that the standard time for Operation B included in the budget did not incorporate expected time savings from the use of new machinery from the start of the period. The standard time should have been reduced to 12 minutes. Operation B was actually carried out 370 times in the period in a total of 80 hours. The operational workers were paid £850.

What was the operational labour efficiency variance?

A. £60 adverse

B. £75 favourable

C. £100 adverse

D. £125 adverse

Showing your workings.

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