The following labor standards have been established for a particular product: Th
ID: 2493790 • Letter: T
Question
The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: What is the labor rate variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.. zero variance). Omit the "$" sign in your response.) What is the labor efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)Explanation / Answer
Answer:a
Labor rate variance = (AH × AR) – (AH × SR)
= $96320 – (5600 × $17.10)
= $560 U
Answer:b
Labor efficiency variance = SR(AH – SH*)
= $17.10 (5600 – 5200)
= $6840 U
*SH = Standard hours per unit × Actual output
= 4.0× 1300 = 5200
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.