During March 2014, Toby Tool & Die Company worked on four jobs. A review of dire

Question

During March 2014, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.

Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.

Prepare a report for the plant supervisor on direct labor cost variances for March. (Round quantity variance, actual rate, standard rate and price variance to 2 decimal places, e.g. 10.50.)

Explanation / Answer

Working Note

Job No Actual Hours AH Standard Hours SH Quantity Variance SR*(SH-AH) Actual Rate AR Standard Rate SR Price Variance AH*(SR-AR) A257 207 216 180 Favourable 20 20 0 No Variance A258 438 424 -280 Unfavourable 22 20 -876 Unfavourable A259 318 317 -20 Unfavourable 21 20 -318 Unfavourable A260 118 112 -120 Unfavourable 17 20 354 Favourable Totals -240 Unfavourable -840 Unfavourable

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