The following information is for direct labor cost for X Company for 2016: Budge

Question

The following information is for direct labor cost for X Company for 2016: Budgeted labor hours per unit of product Budgeted hourly wage rate Budgeted production Actual labor hours per unit of product Actual hourly wage rate Actual production 2.1 $10.00 5,740 units 1.9 $10.20 6,050 units 1. What was the direct labor static budget for 2016? Submit Answer Tries 0/2 2. What was the direct labor flexible budget variance for 2016 (a positive number means a favorable variance; a negative number means an unfavorable variance)? Submit Answer Tries 0/2

Explanation / Answer

1. Static labour budget = (5740*2.1*10) = $120540

2. Flexible budget variance = (Flexible budget cost-actual cost)

= (6050*2.1*10)-(6050*1.9*10.20)

Flexible budget variance = 9801 favourable

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