2 Exercise 10-2 Direct Labor Variances [L010-2] labor workers a total of $10,800

Question

2 Exercise 10-2 Direct Labor Variances [L010-2] labor workers a total of $10,800 for this work, or $9.00 per hour According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a Print (SH SR) to prepare 6,200 meals? 2. What is the standard labor cost al 3. What is the labor s References 4. What is the labor rate variance and the labor efficiency variance? no effect (le, zero varlance). Input all amounts as positive values. Do no round intermediate calculations.)

Explanation / Answer

Solution 1:

Standard direct labor hours allowed to prepared 6200 meals = 6200 *0.20 = 1240 hours

Solution 2:

Standard direct labor cost allowed = Standard direct labor hours * standard rate of direct labor

1240 * $8.50 = $10,540

Solution 3:

Labor spending variance = Standard direct labor cost - Actual direct labor cost

= $10,540 - $10,800 = $260 U

Solution 4:

Direct labor rate variance = (SR - AR) * AH = ($8.50 - $9) * 1200 = $600 U

Direct labor efficiency variance = (SH - AH) * SR

= (1240 - 1200) * $8.50 = $340 F

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