Direct Labor Variances Tip Top Corp. produces a product that requires 10 standard hours per unit at a standard hourly rate of $8 per hour. If 6,400 units required 65,900 hours at an hourly rate of $7.6 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct labor rate variance $-11160 Favorable b. Direct labor time variance $ c. Direct labor cost variance $ -I get this number but its wrong?? Please help me step by step so I can see what I am doing wrong.. LIz C
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.
Direct Labor Variances
Tip Top Corp. produces a product that requires 10 standard hours per unit at a standard hourly rate of $8 per hour. If 6,400 units required 65,900 hours at an hourly rate of $7.6 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| a. Direct labor rate variance | $-11160 | Favorable |
| b. Direct labor time variance | $ | |
| c. Direct labor cost variance | $ |
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