Question
In: Accounting
Given the following information in standard costing: Standard 19,400 hours at $7.40 Actual 19,200 hours at...
Given the following information in standard costing:
| Standard | 19,400 hours at $7.40 |
| Actual | 19,200 hours at $7.20 |
What is the direct labor rate variance?
Multiple Choice
-
$3,840 Unfavorable
-
$3,840 Favorable
-
$2,860 Unfavorable
-
$2,860 Favorable
Solutions
Expert Solution
| WORKING NOTES: | ||||||||
| Standard Cost | Actual Cost | |||||||
| Standard Time | Std. Rate | Total Cost | Actual Time | Act. Rate | Actual Cost | |||
| 19400 | $ 7.40 | $ 1,43,560 | 19200 | $ 7.20 | $ 1,38,240 | |||
| Hrs | Per Hours | Hrs | Per Hours | |||||
| SOLUTION : | ||||||||
| Labour Rate Variance = (Actual Rate - Standard Rate ) X Actual Hours | ||||||||
| Labour Rate Variance = ( | $ 7.20 | '-' | $ 7.40 | ) X | 19,200 | |||
| Labour Rate Variance = | $ 0.20 | X | 19,200 | |||||
| Labour Rate Variance = | 3840 | (favorable) | ||||||
| Answer = Option 2 = $ 3,840 (Favourable) | ||||||||
ekkarill92 answered 1 year agoRelated Solutions
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Labor
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Labor worked
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Standard labor rate - $28 per hour
Standard material per unit - 9 lbs
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Standard material cost $12 per pound
Standard variable overhead rate $15 per labor hour
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standard labor hours per unit
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standard labor rate
$17 per hour
actual hours worked
2,000 hours
actual labor
$38,000
actual output
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$1,500 unfavorable
$4,250 unfavorable
$1,500 favorable
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Actual machine hours used (AH)
4,900
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Standard machine hours (for actual production) (SH)
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Actual variable overhead rate per hour (AVR)
$
4.55
Standard variable overhead rate per hour (SVR)
$
4.40
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Variable Manufacturing Cost ($/unit)
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