2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is P10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance

2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required was 600 direct labor hours at an actual cost of $6,060. According to the standard cost card for the product, 0.6 of labor hour should be required for each unit of the product produced. Standard cost is P10 per labor hour. The standards were based on production level of 1,100 units. Compute the following (show your solution): a. Budgeted labor hours b. Budgeted labor cost c. Actual labor rate d. Standard labor hours e. Standard labor cost f. Total labor cost variance g. Rate variance h. Efficiency variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

2. During the month, 1,200 units of Product LTK were produced. Actual direct labor hour required
was 600 direct labor hours at an actual cost of P6,060.
According to the standard cost card for the product, 0.6 of labor hour should be required for each
unit of the product produced. Standard cost is P10 per labor hour. The standards were based on
production level of 1,100 units.
Compute the following (show your solution):
a. Budgeted labor hours
b. Budgeted labor cost
c. Actual labor rate
d. Standard labor hours
e. Standard labor cost
f. Total labor cost variance
g. Rate variance
h. Efficiency variance

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Step 2: Working for budgeted labor hours and budgeted labor cost

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Step 3: Working for actual labor rate

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Step 4: Working for standard labor hours and standard labor hours

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Step 5: Working for labor variance

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