Standard direct labor cost: Also referred to as simply standard cost, this is a budgeted amount of labor cost per unit of product. Standard costs are developed for direct materials, direct labor and overhead. They are used in planning, budgeting, and forecasting. Standard Direct Labor Cost The controller at your shoemaking company has determined that under normal conditions, you pay your employees $8.30 per hour and it will take 2.6 hours of labor per pair of shoes. Given this information, calculate the standard cost of labor per pair of shoes. If required, round the standard labor per pair of shoes to the nearest cent. Manufacturing Costs Direct Labor Feedback Standard Price x Standard Hours per Pair 2.6 ✔ hours 8.30 per hour ✓ Check My Work Use the standard price and standard hours values shown to compute the standard labor cost per pair Actual Direct Labor Cost During May, your shoe-making company incurred actual direct labor costs of $58.872 for 6.690 hours of direct labor in the production of 2.150 pairs of shoes. Given this information, calculate the actual cost of labor per hour. If required, round the actual cost of labor per hour to the nearest cent. Manufacturing Costs Actual Total Cost / Actual Total Hours = Actual Cost per Hour Direct Labor $58,872 ✔ 6,690✔ hours 8.8 ✔ Check My Work Use the actual total cost of labor and actual hours used as shown to compute the actual labor cost per hour. APPLY THE CONCEPTS: Conduct the direct labor cost variance analysis Illustrated Example: Calculating Direct Labor Cost Variance Complete the following graphic to compute the direct labor rate variance, the direct labor time variance, and the total direct labor cost variance for your shoe-making business. When required, enter the rates as dollars and cents. If required, use the minus sign to indicate a negative value. Actual Cost Standard Cost Actual Hours Actual Hours Standard Rate 6,690 V 8.30 ✔ $ 55,527 ✔ 422 Direct Labor Time Variance 55,527✔ 55,527 ✔ 3,345 V 6,690 ✔ Standard Cost per Pair 21.58 ✔ Actual Rate 8.8 ✔ 58,872 ✔ Direct Labor Rate Variance 58,872 Standard Hours 2.6 X Standard Rate 8.30 ✔