18) The standard direct labor cost to produce 1 pound of output for Noth Company

Question

18) The standard direct labor cost to produce 1 pound of output for Noth Company is presented below. Related data regarding the planned and actual production activities for the current month for the company are also given below. (DLH = Direct Labor Hours)

Direct Labor Standard:  .4 DLH @ $12.00 per DLH

Planned production

15,000 pounds

Actual production

15,500 pounds

Actual direct labor costs (6,250 DLH)

$75,250

Noth Company’s direct labor rate variance for the current month would be __________?

19) Noth Company’s direct labor efficiency variance for the current month would be __________?

Direct Labor Standard:  .4 DLH @ $12.00 per DLH

Planned production

15,000 pounds

Actual production

15,500 pounds

Actual direct labor costs (6,250 DLH)

$75,250

4 The officers of Bradshaw Company are reviewing the profitability of the company's four products and the potential effects of several proposals for varying the product mix. An excerpt from the income statement and other data follow: Totals Product P Product Q Product R Product S $62,600 $10,000 $18,000 $12,600 $22,000 44,2744,7507,05613,96818,500 $18,326 S 5,250 $10,944 $ (1,368) S 3,500 12,0121,9902,9762,8264,220 Income before income taxes $ 6,314 S 3,260 S 7,968 $ (4,194) S (720) 1,0001,2001,800 2,000 $7.00 $11.00 6.00 1.20 Revenues Cost of goods sold Gross profit Operating expenses Units solod Sales price per unit Variable cost of goods sold per unit Variable operating expenses per unit $10.00 $15.00 3.00 1.25 6.50 1.00 2.50 1.17 Production of P can be doubled by adding a second shift, but higher wages must be paid, increasing the variable cost of goods sold to S3.50 for each additional unit. If the 1,000 additional units of P can be sold at $10 each, the total effect on income before income taxes will

Explanation / Answer

18) Direct Labor rate variance = (Actual Hours x Actual rate) - (Actual Hours x Standard rate)

= $75,250 - (6,250 x $12)

= $250 ( Unfavourable)

19) Direct labor efficiency variance = ( Actual Hours x Standard rate) - (Standard Hours x Standard rate)

= (6,250 x $12) - ( 6,200 x $12)

= $600 Unfavourable

Standard Hours = Output x hours required per unit = 15,500 x 0.4 = 6,200 hours

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.