In: Accounting
Actual quantity of direct labor 5,000 hours
Actual direct labor rate $10 per hour
Total direct labor variance $8,600 Unfavorable .
Direct labor rate variance $4,000 Unfavorable .
Standard hours allowed per unit produced 2 hours
Required: Find the following unknowns.
a. Direct labor efficiency variance
b. Standard rate per direct labor hour
c. Actual quantity produced
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| Part a | ||||
| Total direct labor variance | $ 8,600 | U | ||
| Direct labor rate variance | $ 4,000 | U | ||
| Direct Labor Efficiency Variance | $ 4,600 | U | ||
| Part b | ||||
| Direct labor rate variance | $ 4,000 | U | ||
| (AH*AR)-(AH*SR) | $ 4,000 | U | ||
| (5000*10)-(5000*SR) | $ 4,000 | U | ||
| 50000-(5000*SR) | $ 4,000 | U | ||
| 50000-4000 | 5000*SR | |||
| SR | 46000/5000 | |||
| Standard Rate per Direct Labor Hour | $ 9.20 | |||
| Part c | ||||
| Direct Labor Efficiency Variance | $ 4,600 | U | ||
| (SR*AH)-(SR*SH) | ||||
| (9.2*5000)-(9.2*SH) | $ 4,600 | U | ||
| 46000-4600 | 9.2*SH | |||
| Standard Hour | 41400/9.2 | |||
| Standard Hour | 4,500 | Hours | ||
| One Unit need Stadnard Hour | 2.00 | Hours | ||
| Acutal Quantity Produced | 4500/2 | 2,250 | Units | |