Answer:
Labor Efficiency Variance = $12,480 Unfavorable
Explanation:
Labor Efficiency variance calculates the capacity utilization of labor.
Formula for Labor Efficiency Variance = ( Standard Labor Hours - Actual Hours) [tex]\times[/tex] Standard Rate
Standard Labor hours for actual output = 10,000 units [tex]\times[/tex] 2 hours = 20,000 hours
Standard Rate = $12.00
Actual Hours = 21,040 hours
Therefore, Labor Efficiency Variance = (20,000 - 21,040) [tex]\times[/tex] $12
= - $12,480
Since the value is negative it is unfavorable as actual hours is more than standard hours.
