Erie Company manufactures a small mp3 player called the Jogging Mate. The compan

Question

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 27 minutes Standard Rate per Hour $5.80 Standard Cost $2.61 During August, 9,460 hours of direct labor time were needed to make 19,800 units of the Jogging Mate. The direct labor cost totaled $53,922 for the month Required 1. According to the standards, what direct labor cost should have been incurred to make 19,800 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

Explanation / Answer

Particulars Standard Actual Hrs Rate amount Hrs Rate amount Labour      8,910.00      5.8000      51,678.00      9,460.00            5.70      53,922.00 Overhead      8,910.00           4.70      41,877.00      9,460.00            5.00      47,300.00 Actual output    19,800.00 Labour hrs reqd(19800*27/60)      8,910.00 Labour Cost Variance = Std cost-Actual cost Labour Cost Variance = 51678 - 53922 Labour Cost Variance = 2,244 U DLRV= (SR-AR)AH DLRV= (5.8-5.7)9460 DLRV= 946 F DLEV = (SH-AH)SR DLEV = (8910 - 9460)5.8 DLEV = 3190U VORV = (SR-AR)AH VORV = (4.7 - 5)9460 VORV = 2838 U VOEV = (SH-AH)SR VOEV = (8910-9460)4.70 VOEV = 2585 U

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