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i Safari File Edit View History Bookmarks Window Help ?62% E. Tue 2:42 PM Q?E dy Guided Solutions and Study Help Chapter 10 Homework 201870-Second Summer 2018-A Chapter 10 Homework a Save &Exit; Submit Screen Shot 2018-07.1.43 PM Question 4 (of 5) 20.00 points Screen Shot 2018-07...1.55 PM Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate mp3 player are as follows: Standard Hours 24 minutes Standard Rate per Hour $5,40 Cost $2.16 Screen Shot 2018-07...2.08 PM During August, 8,320 hours of direct labor time were needed to make 19,300 units of the Jogging Mate. The direct labor cost totaled $44,096 for the month. Required: 1. According to the standards, what direct labor cost should have been incurred to make 19,300 units of the Jogging Mate? By how much does this differ from the cost that was incurred? (Round Standard labor time per unit to 2 decimal places.) Number of units manufactured Standard labor time per unit Total standard hours of labor time allowed Standard direct labor rate per hour Total standard direct labor cost Actual direct labor cost Standard direct labor cost Total variance-unfavorable 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency 31

Explanation / Answer

1)

b) Labour rate variance = (5.4*8320-44096) = 832 F

Labour efficiency variance = (7720-8320)*5.40 = 3240 U

c) Variable overhead rate variance = (4.7*8320-41600) = 2496 U

Variable overhead efficiency variance = (7720-8320)*4.7 = 2820 U

No of units manufactured 19300 Standard labour time per unit 0.40 Total standard labour hour allowed 7720 Rate per hour 5.40 Standard labour cost 41688 Actual labour cost 44096 Standard labour cost 41688 Total labour variance-Unfavorable -2408

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