2. Labor Performance Variances. Ellsworth-Trevor, Inc. prepares monthlyproduction budgets for its largest selling product, Elsby, which is manufacturedthrough three departments: Mixing, Processing, and Packaging. Budgeted andactual amounts for April were as shown on the next page.426PLANNING AND CONTROL OF MATERIALS AND LABORDepartmentMixing......Processing....Packaging.....BudgetedHoursDepartmentMixing....Processing.1,1003,320580ActualLaborCost$ 4,31212,7001,744The following standards have been adopted for this product:StandardHoursper UnitUnitsProduced1.5.5.0Packaging... .. 0.5Required: A labor cost control report for April.740615800Standard LaborCost per Hour$4.104.504.00PART IV

A management tool for assessing labor usage effectiveness and efficiency in a corporation is the…

Answered: Processing...... 5.0 Packaging.. 0.5…

Business

Accounting

Processing...... 5.0 Packaging.. 0.5 Required: A labor cost control report for April. 4.50 4.00

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

2. Labor Performance Variances. Ellsworth-Trevor, Inc. prepares monthly
production budgets for its largest selling product, Elsby, which is manufactured
through three departments: Mixing, Processing, and Packaging. Budgeted and
actual amounts for April were as shown on the next page.
426
PLANNING AND CONTROL OF MATERIALS AND LABOR
Department
Mixing......
Processing....
Packaging..
...
Budgeted
Hours
Department
Mixing....
Processing.
1,100
3,320
580
Actual
Labor
Cost
$ 4,312
12,700
1,744
The following standards have been adopted for this product:
Standard
Hours
per Unit
Units
Produced
1.5.
5.0
Packaging... .. 0.5
Required: A labor cost control report for April.
740
615
800
Standard Labor
Cost per Hour
$4.10
4.50
4.00
PART IV

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Step 2: Computation of standard hours for actual production

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Step 3: Computation of standard labor cost for actual production

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Step 4: Computation of labor cost variance

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