Delta Manufacturing has a standard wage rate of $12.50 per direct labor-hour (DLH), and each unit of output requires 5.2 DLHs.In June, 3,200 units were produced, the actual wage rate was $12.20 perDLH, and the actual hours worked were 17,500 DLHs.Compute the Labor Efficiency Variance for June.

Step 1: Definition of Labor Efficiency VarianceLabor Efficiency Variance (LEV) measures the…

Answered: Delta Manufacturing has a standard wage…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 7PB: Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid...

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Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Fitzgerald Company manufactures sewing machines, and they produced 2,500 this past month. The standard variable manufacturing overhead (M0H) rate used by the company is $6.75 per machine hour. Each sewing machine requires 13.5 machine hours. Actual machine hours used last month were 33,500, and the actual variable MOH rate last month was $7.00. Calculate the variable overhead rate variance and the variable overhead efficiency variance.
If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
Calculating factory overhead The standard capacity of a factory is 8,000 units per month. Cost and production data follow: Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.
Power Co.s labor information for June is as follows: A. What was the actual labor rate per hour? B. What was the standard labor rate per hour? C. What was the total standard labor cost for units produced in June? D. What was the direct labor time variance for June?
Calculating factory overhead The normal capacity of a factory is 10,000 units per month. Cost and production data follow: Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.
Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $90,000, and there was an unfavorable direct labor time variance of $5,520. A. What was the standard cost per hour? B. How many actual hours were worked? C. If the workers were paid $3.90 per hour, what was the direct labor rate variance?
Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is expected to amount to 20,000. The standard cost for a unit of the companys product estimates the variable overhead as follows: The actual data for the period follow: Using the four-variance method, calculate the overhead variances. (Hint: First compute the budgeted fixed overhead rate.)
Ellis Companys labor information for September is as follows: A. Compute the standard direct labor rate per hour. B. Compute the direct labor time variance. C. Compute the standard direct labor rate if the direct labor rate variance was $2,712.30 (unfavorable).
The normal capacity of a manufacturing plant is 30,000 direct labor hours or 20,000 units per month. Standard fixed costs are 6,000, and variable costs are 12,000. Data for two months follow: For each month, make a single journal entry to charge overhead to Work in Process, to close Factory Overhead, and to record variances. Indicate the types of variances and state whether each is favorable or unfavorable. (Hint: You must first compute the flexible-budget and production-volume variances.)
Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an average of 10,000 units each month. The factory standards are 20,000 hours of direct labor and 10,000 pounds of materials for this volume. The standard cost of direct labor is 9.00 per hour, and the standard cost of materials is 4.00 per pound. The standard factory overhead at this level of production is 20,000. During the current month the production and cost reports reflected the following information: On the basis of this information: 1. Prepare a standard cost summary. 2. Calculate the materials (use the materials purchase price variance) and labor cost variances, and indicate whether they are favorable or unfavorable, using the formulas on pages 421422 and 424.

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Delta Manufacturing has a standard wage rate of $12.50 per direct labor- hour (DLH), and each unit of output requires 5.2 DLHs. In June, 3,200 units were produced, the actual wage rate was $12.20 per DLH, and the actual hours worked were 17,500 DLHs. Compute the Labor Efficiency Variance for June.