Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,500, and the total direct labor budget variance was $1,820 unfavorable. The standard labor rate was $22.40 per hour, but recent resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate variance of $4,900 for August. Required: a. Calculate the actual direct labor rate paid per hour during August. Note: Do not round intermediate calculations. Round your answer to 1 decimal place. b. Calculate the dollar amount of the direct labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). c. Calculate the standard direct labor hours allowed for the actual level of activity during August. (Hint: Use the formula for
Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,500, and the total direct labor budget variance was $1,820 unfavorable. The standard labor rate was $22.40 per hour, but recent resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate variance of $4,900 for August. Required: a. Calculate the actual direct labor rate paid per hour during August. Note: Do not round intermediate calculations. Round your answer to 1 decimal place. b. Calculate the dollar amount of the direct labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). c. Calculate the standard direct labor hours allowed for the actual level of activity during August. (Hint: Use the formula for
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Vai
Transcribed Image Text:Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However,
some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,500, and the
total direct labor budget variance was $1,820 unfavorable. The standard labor rate was $22.40 per hour, but recent
resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate
variance of $4,900 for August.
Required:
a. Calculate the actual direct labor rate paid per hour during August.
Note: Do not round intermediate calculations. Round your answer to 1 decimal place.
b. Calculate the dollar amount of the direct labor efficiency variance for August.
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect
(i.e., zero variance).
c. Calculate the standard direct labor hours allowed for the actual level of activity during August. (Hint: Use the formula for
the quantity variance and solve for the missing information.)
a. Actual direct labor rate per hour
b. Direct labor efficiency variance
c. Standard direct labor hours
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 3 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