Direct Labor Variances Ada Clothes Company produced 22,000 units during April. The Cutting Department used 4,200 direct labor hours at an actual rate of $11.60 per hour. The Sewing Department used 7,000 direct labor hours at an actual rate of $11.30 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.50. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Cutting Department Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance Unfavorable ✓ $ ✓ Sewing Department Favorable Favorable Favorable ✔ time variance, b. The two departments have opposite results. The Cutting Department has a(n) unfavorable ✔rate variance and a(n) favorable resulting in a total favorable ✓ cost variance. In contrast, the Sewing Department has a(n) favorable ✔rate variance but has a(n) unfavorable time variance, resulting in a total unfavorable ✔cost variance. Unfavorable Unfavorable ✔ ✓
Direct Labor Variances Ada Clothes Company produced 22,000 units during April. The Cutting Department used 4,200 direct labor hours at an actual rate of $11.60 per hour. The Sewing Department used 7,000 direct labor hours at an actual rate of $11.30 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.50. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Cutting Department Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance Unfavorable ✓ $ ✓ Sewing Department Favorable Favorable Favorable ✔ time variance, b. The two departments have opposite results. The Cutting Department has a(n) unfavorable ✔rate variance and a(n) favorable resulting in a total favorable ✓ cost variance. In contrast, the Sewing Department has a(n) favorable ✔rate variance but has a(n) unfavorable time variance, resulting in a total unfavorable ✔cost variance. Unfavorable Unfavorable ✔ ✓
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:Direct Labor Variances
Ada Clothes Company produced 22,000 units during April. The Cutting Department used 4,200 direct labor hours at an actual rate of $11.60 per hour. The Sewing
Department used 7,000 direct labor hours at an actual rate of $11.30 per hour. Assume there were no work in process inventories in either department at the beginning
or end of the month. The standard labor rate is $11.50. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively.
a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable
variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Cutting Department
Unfavorable
Favorable
Favorable
Direct Labor Rate Variance
Direct Labor Time Variance
Total Direct Labor Cost Variance
✓
✓
$
Sewing Department
Favorable
Unfavorable
Unfavorable
✔rate variance and a(n) favorable
✔ time variance,
b. The two departments have opposite results. The Cutting Department has a(n) unfavorable
resulting in a total favorable ✓ cost variance. In contrast, the Sewing Department has a(n) favorable ✔rate variance but has a(n) unfavorable
✔cost variance.
time variance, resulting in a total unfavorable
✔
V
✓
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education