Direct Labor Variances The following data relate to labor cost for production of 6,100 cellular telephones: Actual: 4,110 hrs. at $15.00 Standard: 4,050 hrs. at $15.30 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 Time variance Total direct labor cost variance b. The employees may have been less-experienced or poorly trained, thereby resulting in al or training may have resulted in efficient performance. Thus, the actual time required was labor rate than planned. The lower level of experience than standard.
Direct Labor Variances The following data relate to labor cost for production of 6,100 cellular telephones: Actual: 4,110 hrs. at $15.00 Standard: 4,050 hrs. at $15.30 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 Time variance Total direct labor cost variance b. The employees may have been less-experienced or poorly trained, thereby resulting in al or training may have resulted in efficient performance. Thus, the actual time required was labor rate than planned. The lower level of experience than standard.
Chapter1: Financial Statements And Business Decisions
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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.
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Transcribed Image Text:Direct Labor Variances
The following data relate to labor cost for production of 6,100 cellular telephones:
Actual: 4,110 hrs. at $15.00
Standard: 4,050 hrs. at $15.30
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
Time variance
Total direct labor cost variance
b. The employees may have been less-experienced or poorly trained, thereby resulting in al
or training may have resulted in
efficient performance. Thus, the actual time required was
labor rate than planned. The lower level of experience
than standard.
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