Direct Labor Variances The following data relate to labor cost for production of 5,700 cellular telephones:...

Direct Labor Variances

The following data relate to labor cost for production of 5,700 cellular telephones:

Actual:	3,870 hrs. at $15.6
Standard:	3,810 hrs. at $15.9

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	$	Favorable
Time variance	$	Unfavorable
Total direct labor cost variance	$	Favorable

Solutions

Expert Solution

Requirements

>Rate Variance = $ - 1161 Favourable [enter as negative]
>Time Variance = $ 954 Unfavourable
> Direct labor cost variance = $ - 207 Favourable [enter as negative]

Calculations

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$ 15.90	-	$ 15.60	)	x	3870
	1161
	Variance		$ 1,161.00			Favourable-F

Labour time Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3810	-	3870	)	x	$ 15.90
	-954
	Variance		$ 954.00			Unfavourable-U

Labor Cost Variance
(	Standard Cost = 3810 x 15.9	-	Actual Cost = 3870 x 15.6	)
(	$ 60,579.00	-	$ 60,372.00	)
	207
	Variance		$ 207.00			Favourable-F

ekkarill92 answered 1 year ago

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