XYZ compay manufactures bikes. The following data forMay of the current year are

Question

XYZ compay manufactures bikes. The following data forMay of the current year are available. Quantity of direct labor used     1,400 hours Actual rate for directlabor         16.15 perhour bicycles completed inMay            280 Standard direct labor per bicycle 5.30 hours Standard rate for directlabor        15.25 perhour Planned bicycle forMay               210 a. determine the direct labor rate and time variances. b. How much direct labor should be debited to work inprocess XYZ compay manufactures bikes. The following data forMay of the current year are available. Quantity of direct labor used     1,400 hours Actual rate for directlabor         16.15 perhour bicycles completed inMay            280 Standard direct labor per bicycle 5.30 hours Standard rate for directlabor        15.25 perhour Planned bicycle forMay               210 a. determine the direct labor rate and time variances. b. How much direct labor should be debited to work inprocess

Explanation / Answer

a) direct labor rate... direct labor rate is given as 16.15 per hour # of hours per bicycle is 1400/280 = 5 so direct labor rate per bicycle is 5*16.15= $80.75 time variance is planned (5.3 hrs per bike) - actual (5 hrs per bike) = .3 hours standard deviation if needed is (5.3-5)/5.3 = .0566 or5.66% the amount of direct labor should be the planned # of bikes*actuallabor required so 210 bikes*5 hours per bike, = 1050 hours

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