Question

Direct Labor Variances

Ada Clothes Company produced 20,000 units during April. The Cutting Department used 3,800 direct labor hours at an actual rate of $11.50 per hour. The Sewing Department used 6,300 direct labor hours at an actual rate of $11.20 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 $11.40. 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 $?

Incorrect

Favorable

$ ?

Unfavorable

b. The two departments have opposite results. The Cutting Department has a(n)

unfavorable

rate variance 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