Question

Direct Labor Variances

The following data relate to labor cost for production of 5,800 cellular telephones:

Actual:	3,930 hrs. at $15.20
Standard:	3,870 hrs. at $15.50

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Rate variance	$
Time variance	$
Total direct labor cost variance	$

b. The employees may have been less-experienced or poorly trained, thereby resulting in a   labor rate than planned. The lower level of experience or training may have resulted in   efficient performance. Thus, the actual time required was   than standard.

Answer 1

Bbb) The employees may have been less experienced or poorly trained thereby resulting in lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance . Thus the actual time required was more than standard.