Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $99,500, and there was an unfavorable direct labor time variance of $4,000. If the workers were paid $5 per hour, what was the direct labor rate variance ? [Hint: enter your answer in POSITIVE to denote favorable, NEGATIVE to denote unfavorable] [Hint: Round your answer in 2 decimal places]

Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $99,500, and there was an unfavorable direct labor time variance of $4,000. If the workers were paid $5 per hour, what was the direct labor rate variance ? [Hint: enter your answer in POSITIVE to denote favorable, NEGATIVE to denote unfavorable] [Hint: Round your answer in 2 decimal places]

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Description: Queen Industries uses a standard costingsystem in the manufacturing of its singleproduct. It requires 2 hours of labor toproduce 1 unit of final product. In February,Queen Industries produced 12,000 units. Thestandard cost for labor allowed for the

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

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.

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Question

Queen Industries uses a standard costing
system in the manufacturing of its single
product. It requires 2 hours of labor to
produce 1 unit of final product. In February,
Queen Industries produced 12,000 units. The
standard cost for labor allowed for the output
was $99,500, and there was an unfavorable
direct labor time variance of $4,000.
If the workers were paid $5 per hour, what
was the direct labor rate variance ? [Hint:
enter your answer in POSITIVE to denote
favorable, NEGATIVE to denote unfavorable]
[Hint: Round your answer in 2 decimal places]

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Step 2: Working for standard direct labor hours and standard direct labor rate

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Step 3: Working for actual labor hours

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