The following data is given for the Harry Company: Budgeted production --26,000

ID: 2370764 • Letter: T

Question

The following data is given for the Harry Company:

Budgeted production --26,000 units

Actual production -------27,500 units

Materials:

Standard price/ounce $6.50

Standard ouncese per completed unit 8

Actual ounces purchased and used in production 228,000

Actual price paid for materials $1,504,800

Labor:

Standard hourly rate $22 per hour

Standard hours allowed per completed unit 6.6

Actual labor hours worked 183,000

Actual total labor costs $4,020,000

Overhead:

Actual and budgeted fixed overhead $1,029,600

Standard variable overhead rate $24.50 per standard labor hour

Actual variable overhead costs $4,520,000

Overhead is applied on standard labor hours.

The direct labor time variance is:

a) 6,000 favorable

b) 6,000 unfavorable

c) 33,000 unfavorable

d) 33,000 favorable

Hi,

Please find the answer as follows:

Direct labor time variance = 4020000 - 183000*22 = 6000 (F)

Thanks.

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