A popular product manufactured by Party-On! is a festively decorated punch bowl. The company's standard cost system calls for 0.10 hours of direct labor per bowl, at a standard wage rate of $16. During September, Party-On! produced 1,200 of these bowls at an actual direct labor cost of $2,160 for 180 direct labor hours. a. What is the actual wage rate per hour? b. Compute the labor rate and efficiency variances for the month. c. Assuming the company's direct labor standards are reasonable, was the actual wage rate paid to workers in September (versus the standard rate) a beneficial strategy?
A popular product manufactured by Party-On! is a festively decorated punch bowl. The company's standard cost system calls for 0.10 hours of direct labor per bowl, at a standard wage rate of $16. During September, Party-On! produced 1,200 of these bowls at an actual direct labor cost of $2,160 for 180 direct labor hours. a. What is the actual wage rate per hour? b. Compute the labor rate and efficiency variances for the month. c. Assuming the company's direct labor standards are reasonable, was the actual wage rate paid to workers in September (versus the standard rate) a beneficial strategy?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:A popular product manufactured by Party-On! is a festively decorated punch bowl. The company's standard cost system calls for 0.10
hours of direct labor per bowl, at a standard wage rate of $16. During September, Party-On! produced 1,200 of these bowls at an actual
direct labor cost of $2,160 for 180 direct labor hours.
a. What is the actual wage rate per hour?
b. Compute the labor rate and efficiency variances for the month.
c. Assuming the company's direct labor standards are reasonable, was the actual wage rate paid to workers in September (versus the
standard rate) a beneficial strategy?
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