Direct Labor Variances Death Valley Bicycle Company manufactures mountain bikes. The following data for October of the current year are available: Quantity of direct labor used 520 hrs. Actual rate for direct labor $12.10 per hr. Bicycles completed in October 240 Standard direct labor per bicycle Standard rate for direct labor Planned bicycles for October Determine the direct labor rate and time variances. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Rate variance Time variance 2 hrs. $12.30 per hr. 270

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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.