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

Job no Actual Hours Actual cost Actual rate = Actual cost / actual hours Standard Hours Standard cost Standard rate = Standard cost / standard hours A257 218 4578 $                     21.00 224 4704 $              21.00 A258 437 10488 $                     24.00 421 8841 $              21.00 A259 304 6962 $                     22.90 305 6405 $              21.00 A260 103 1854 $                     18.00 97 2037 $              21.00 Quantity variance = (actual quanity used / standard quantity used ) x Standard cost per unit $       20.44 Favorable $       21.80 unfavorable $       20.93 Favorable $       22.30 Unfavorable Price Variance = (Actual cost incurred / Standard cost ) x Actual hours 218.00 Favorable 499.43 Unfavorable 331.52 Unfavorable 88.29 Favorable

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