l ending September ction in units of finished produset 3 The director of cost ma
ID: 2588946 • Letter: L
Question
l ending September ction in units of finished produset 3 The director of cost management for the B month's actual results with a monthly plan just ended the following schedule. angorinstrument Corporation compares each The standard direct-labor rates for the year and the standard hours allowed, given the actual output in April, are shown in Standard Direct-Labor Standard Direct-Labor Hours Rate per Hour Allowed, Given April Output $16.00 500 A new union contract negotiated in March resulted in actual wage rates that differed fro the standard rates. The actual direct-labor hours worked and the actual direct-labor rates per hour experienced for the month of April were as follows: Actual Direct-Labor Hours Actual Direct-Labor Rate per Hour 550 $17.4 Required: Compute the direct labor rate and efficiency variances for April.Explanation / Answer
3. Labour rate variance = (Standard rate-actual rate)actual hours
= (16-17.40)550
Labour rate variance = 770 Unfavourable
Labour efficiency variance = (Standard hours-actual hours)Standard rate
= (500-550)16
Labour efficiency variance = 800 Unfavourable
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