lion athletics company manufactures commuter bicycles from recycled materials. the following data for october are available: quantity of direct labor used- 5,000 hours actual rate for direct labor- $22.75 per hour bicycles completed in october- 800 bicycles standard direct labor per bicycle- 6 hours standard rate for direct labor- $24 per hour NOW FIND: direct labor rate variance: direct labor time variance: total direct labor cost variance:
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.
lion athletics company manufactures commuter bicycles from recycled materials. the following data for october are available:
quantity of direct labor used- 5,000 hours
actual rate for direct labor- $22.75 per hour
bicycles completed in october- 800 bicycles
standard direct labor per bicycle- 6 hours
standard rate for direct labor- $24 per hour
NOW FIND:
direct labor rate variance:
direct labor time variance:
total direct labor cost variance:
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