Question

Greeson Clothes Company produced 23,000 units during June of the current year. The Cutting Department used 4,400 direct labor hours at an actual rate of $13.2 per hour. The Sewing Department used 7,300 direct labor hours at an actual rate of $12.9 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $13.1. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively.

a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department.. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

	Cutting Department	Sewing Department
Direct Labor Rate Variance	$ Unfavorable	$ Favorable
Direct Labor Time Variance	$ Favorable	$ Unfavorable
Total Direct Labor Cost Variance	$ Favorable	$ Unfavorable

b. The two departments have opposite results. The Cutting Department has a(n) unfavorable  rate and a(n) favorable  time variance, resulting in a total favorable  cost variance. In contrast, the Sewing Department has a(n) favorable  rate variance but has a(n) unfavorable  time variance, resulting in a total unfavorable  cost variance.

Answer 1