Brass Works, Inc. produces brass lamps and gift products. Engineers at Brass Works have established the following direct labor standards to produce a brass candelabra: Direct Labor Standard: 2 hours at $10 per hour During April, Brass Works used 2,380 hours of direct labor time to make 1,000 candelabras. The actual wage rate paid was $9 per hour. Compute the following variances: (1) Direct labor rate variance. (2) Direct labor time variance. (3) Total direct labor variance.
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.
Brass Works, Inc. produces brass lamps and gift products. Engineers at Brass Works have established the following direct labor standards to produce a brass candelabra:
Direct Labor Standard: 2 hours at $10 per hour
During April, Brass Works used 2,380 hours of direct labor time to make 1,000 candelabras. The actual wage rate paid was $9 per hour.
Compute the following variances:
(1) Direct labor rate variance.
(2) Direct labor time variance.
(3) Total direct labor variance.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
