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Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping...

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:

Direct material of 5.00 yards at $5.50 per yard

Direct labor of 2.50 hours at $18.00 per hour

Overhead applied per sleeping bag at $19.00

In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $6.10 per yard. The labor used was 11,700 hours at an average rate of $20.50 per hour. The actual overhead spending was $96,200.

Determine the labor rate variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Solutions

Expert Solution

Actual Rate = $20.5 per hour

Standard rate for actual output = $18/5000*5200 = $18.72 per hour

Actual hours = 11700

Labour rate variance = (AH*AR - AH*SR)

11700*$20.5 - 11700*18.72 = $20826 Favourable

ekkarill92 answered 2 years ago
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