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Nana Inc. evaluates manufacturing overhead in its factory by using variance analysis. The following information applies to the month of May: Number of frames manufactured (Actual) (Budget) 19,000   20,000 Variable overhead costs  (Actual) (Budget) 4,100     2 per direct labor hour Fixed overhead costs (Actual) (Budget) 22,000    20,000 Direct labor hours (Actual) (Budget) 2,100     0.1 hours per frame Labor payroll (Actual) (Budget) 10,500   4.50 per direct labor hour What is the direct labor usage variance? a. 900 F b. 900 UF c. 450 F d. 450 UF What is the direct labor rate variance? a. 1050 debit b. 1050 credit c. 950 debit d. 950 credit

Nana Inc. evaluates manufacturing overhead in its factory by using variance analysis. The following information applies to the month of May: Number of frames manufactured (Actual) (Budget) 19,000   20,000 Variable overhead costs  (Actual) (Budget) 4,100     2 per direct labor hour Fixed overhead costs (Actual) (Budget) 22,000    20,000 Direct labor hours (Actual) (Budget) 2,100     0.1 hours per frame Labor payroll (Actual) (Budget) 10,500   4.50 per direct labor hour What is the direct labor usage variance? a. 900 F b. 900 UF c. 450 F d. 450 UF What is the direct labor rate variance? a. 1050 debit b. 1050 credit c. 950 debit d. 950 credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nana Inc. evaluates manufacturing overhead in its factory by using variance analysis. The following information applies to the month of May:

Number of frames manufactured
(Actual) (Budget)
19,000   20,000
Variable overhead costs 
(Actual) (Budget)
4,100     2 per direct labor hour

Fixed overhead costs
(Actual) (Budget)
22,000    20,000

Direct labor hours
(Actual) (Budget)
2,100     0.1 hours per frame

Labor payroll
(Actual) (Budget)
10,500   4.50 per direct labor hour

      • What is the direct labor usage variance?
        a. 900 F
        b. 900 UF
        c. 450 F
        d. 450 UF

      • What is the direct labor rate variance?
        a. 1050 debit
        b. 1050 credit
        c. 950 debit
        d. 950 credit
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