Question Content Area Direct Labor Variances Corpus Christi Bicycle Company manufactures commuter bicycles from recycled materials. Corpus Christi Bicycle Company records standard costs in its accounts. The following data for March are available: Line Item Description Value Quantity of direct labor used 450 hrs. Actual rate for direct labor $14.00 per hr. Bicycles completed in March 210 bicycles Standard direct labor per bicycle 2 hrs. Standard rate for direct labor $14.30 per hr. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Determine for March the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Direct Labor Rate Variance $fill in the blank 2 Direct Labor Time Variance $fill in the blank 4 Total Direct Labor Cost Variance $fill in the blank 6 b. How much direct labor should be debited to Work in Process? fill in the blank 1 of 1$
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.
Question Content Area
Direct Labor Variances
Corpus Christi Bicycle Company manufactures commuter bicycles from recycled materials. Corpus Christi Bicycle Company records
| Line Item Description | Value |
|---|---|
| Quantity of direct labor used | 450 hrs. |
| Actual rate for direct labor | $14.00 per hr. |
| Bicycles completed in March | 210 bicycles |
| Standard direct labor per bicycle | 2 hrs. |
| Standard rate for direct labor | $14.30 per hr. |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
a. Determine for March the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Line Item Description | Amount | Variance |
|---|---|---|
| Direct Labor Rate Variance | $fill in the blank 2 |
|
| Direct Labor Time Variance | $fill in the blank 4 |
|
| Total Direct Labor Cost Variance | $fill in the blank 6 |
|
b. How much direct labor should be debited to Work in Process?
fill in the blank 1 of 1$
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