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ID: 2544039 • Letter: G
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g ned ake sig ment lain doinvokersaved&takeAssignment; ession ocato gnment take raass progress How Direct Labor Variances The following data relate to labor cost for production of 5,700 cellular telephones: Actual: Standard: 3,820 hrs. at $16.2 a. Determine the direct labor rate variance, direct labor time variance, and total negative number using a minus sign and an unfavorable variance as a positive number. 3,880 hrs. at $15.9 direct labor cost variance. Enter a favorable variance as a Rate variance Time variance Total direct labor cost variance b. The employees may have been less-experienced or poorly trained, thereby resulting in a lowerlabor rate than planned. The lower level Favorable Unfavorable Favorable of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard. Feedback Check My work Unfavorable varlances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit) The labor cost variance is the difference between the actual and standard labor cost Consider factors affecting labor performance. Learning Objective 3 536 PM 3/15/2018Explanation / Answer
rate variance = (Std rate- actual rate) * actual qty= (16.2-15.9) * 3880 = 1164
time variance = (budgeted time- actual time) * Actual rate= (3820-3880)*15.9= -954
Total direct labor cost variance= Total budgeted cost- total actual cost = (3820*12.2)- (3880*15.9) = 61884-61692= 192
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