In: Accounting
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?
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 |