a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Favorable Time variance Unfavorable Total direct labor cost variance Favorable V labor rate than planned. The lower level of experience or training b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a lower resulted in lesS -v efficient performance. Thus, the actual time required was more v than standard.

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Favorable Time variance Unfavorable Total direct labor cost variance Favorable V labor rate than planned. The lower level of experience or training b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a lower resulted in lesS -v efficient performance. Thus, the actual time required was more v than standard.

Name: Direct Labor VariancesThe following data relate to labor cost for pro
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Description: Direct Labor VariancesThe following data relate to labor cost for production of 7,200 cellular telephones:Actual:4,860 hrs. at $14.20Standard:4,780 hrs. at $14.50a. Determine the direct labor rate variance, direct labor time variance, and total dire

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Direct Labor Variances
The following data relate to labor cost for production of 7,200 cellular telephones:
Actual:
4,860 hrs. at $14.20
Standard:
4,780 hrs. at $14.50
a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance, Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Rate variance
Favorable
Time variance
Unfavorable
Total direct labor cost variance
Favorable
b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a lower
-v labor rate than planned. The lower level of experience or training may have
resulted in less
- v efficient performance. Thus, the actual time required was more
v than standard.

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The principle of exceptions allows managers to focus on correcting variances between O a. competitor's costs and standard costs b. standard costs and actual costs O c. competitor's costs and actual costs d. variable costs and actual costs
3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to sSupport your answer.
Which one of the following would not explain an adverse direct labor efficiency variance? A. Poor scheduling of direct labor hours. B. Unusually lengthy machine breakdowns. C. Setting standard efficiency at a level that is too low. D. A reduction in direct labor training.
Which of the following statements about fixed overhead variances is FALSE? An unfavorable volume variance means that a firm’s production facilities were under-utilized by producing less units of products than budgeted. Fixed overhead variances consist of a budget variance and a volume variance. The volume variance is a measure of facility utilization. The budget variance represents the difference between the original budgeted fixed overhead cost and the applied fixed overhead cost during a period.
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Which of the following is a possible cause of an unfavorable material quantity variance? A) paying more than should have for workers B) purchasing too much material C) hiring higher-quality workers D) purchasing substandard material
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The rate variance and total direct labor cost variance were not correct, please re do those calculations.
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Which of the following is true of direct labor variances? a. The labor efficiency variance measures the difference between what was paid to direct laborers and what should have been paid. b. The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that should have been used. c. The labor rate variance measures the difference between the labor hours that were originally budgeted and the labor hours that should have been used. d. The labor rate and labor efficiency variances will always add up to the total labor variance. e. The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that were originally budgeted.
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The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate. O True O False