Data on Gantry Company's direct labor costs are given below: Standard direct-labor hours 50,000 Actual direct-labor...

Data on Gantry Company's direct labor costs are given below:


Standard direct-labor hours		50,000
Actual direct-labor hours		49,000
Direct-labor efficiency variance-favorable	$	5,200
Direct-labor rate variance-favorable	$	9,800
Total direct labor payroll	$	245,000

What was Gantry's actual direct labor rate?

Expert Solution

Actual labor rate = $5.00 per hour

Working

Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	50000	-	49000	)	x	$ 5.20
	5200
	Variance		$ 5,200.00			Favourable-F

Standard rate is balancing figure as (5200/1000).

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$ 5.20	-	$ 5.00	)	x	49000
	9800
	Variance		$ 9,800.00			Favourable-F

ekkarill92 answered 2 years ago

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