Japan Company produces lamps that require 3 standard hours per unit at an hourly rate of...

Japan Company produces lamps that require 3 standard hours per unit at an hourly rate of $16.50 per hour. Production of 3,700 units required 11,430 hours at an hourly rate of $17.00 per hour. Enter favorable variances as negative numbers.

(a) Determine the direct labor rate variance.	$(Favorable/Unfavorable)
(b) Determine the direct labor time variance.	$(F/U)
(c) Determine the cost variance.	$(F/U)

Expert Solution

a)Labor rate variance = AH[AR-SR]

= 11430 [17-16.5]

= 5715 U

b)labor time variance = SR[AH-SH]

= 16.5[11430-(3700*3)]

= 16.5[11430-11100]

= 5445 U

C)cost variance =rate variance + time variance

= 5715 +5445

= 11160 U

ekkarill92 answered 2 years ago

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