Problem 10-180 The following labor standards have been The following labor stand
ID: 2513106 • Letter: P
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Problem 10-180 The following labor standards have been The following labor standards have been established for a particular product: Standard labor hours per unit of output Standard labor rate 4.0 hours $17.70 per hours The following data pertain to operations concerning the product for the last month: Actual hours worked Actual total labor cost Actual output 7,600 hours $135,280 1,800 units Required a. What is the labor rate variance for the month? (Input the amount as a positive value. Leave no cells blank be certain to enter "O" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "S" sign in your response.) Labor rate variance (Click to select) b. What is the labor efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank be certain to enter"O" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance) Omit the "$" sign in your response.) Labor efficiency variance (Click to select)Explanation / Answer
Answer a.
Actual Labor Cost = $135,280
Actual hours = 7,600
Standard labor rate = $17.70
Labor Rate Variance = Actual labor cost - Actual hours * Standard Labor rate
Labor Rate Variance = $135,280 - 7,600 * $17.70
Labor Rate Variance = $760 Unfavorable
Answer b.
Standard labor hour per unit = 4.0
Actual Output = 1,800 units
Standard labor hours = Standard labor hour per unit * Actual Output
Standard labor hours = 4.0 * 1,800
Standard labor hours = 7,200
Standard labor rate = $17.70
Labor Efficiency Variance = Standard labor rate * (Actual hours - Standard hours)
Labor Efficiency Variance = $17.70 * (7,600 - 7,200)
Labor Efficiency Variance = $7,080 Unfavorable
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