Question

In: Accounting

What is the direct labor time variance. Choose 2 answers Units =60,000 Cost /hr    Usage...

What is the direct labor time variance.

Choose 2 answers

Units =60,000

Cost /hr    Usage

Standard    $15.40/hr    2.34 hr /unit

Actual    $15.17/hr    2.25 hr /unit

Solutions

Expert Solution

As per the given question,

Standard time for 1 unit of a product is 2.34 hr/unit

Standard hours for 60000 units= 60000*2.34= 140400 hrs.

Actual time taken is 2.25 hr/ unit.

Actual hours for 60000 units= 60000*2.25= 135000 hrs.

Standard rate= $15.40/hr

Direct labor time variance= ( Standard time-Actual time)* Standard rate = (140400-135000)*$15.40 = $ 83160.

Therefore, Direct labor time variance is $ 83160.


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