The following data are given for Taylor Company: Budgeted production Actual production Materials: Standard price per pound Standard pounds per completed unit Actual pounds purchased and used in production Actual price paid for materials Labor: Standard hourly labor rate Standard hours allowed per completed unit Actual labor hours worked Actual total labor costs Overhead: Actual and budgeted fixed overhead Standard variable overhead rate Actual variable overhead costs Overhead is applied based on standard labor hours. 1,000 units 980 units Favorable Unfavorable $2.00 12 11,800 $23,000 $14.00 per hour 4.5 4,560 $62,928 $27,000 $3.50 per standard labor hour $15,500 Compute the direct labor rate and time variances for Taylor Company. Enter favorable variances as negative numbers. Direct labor rate variance Direct labor time variance
The following data are given for Taylor Company: Budgeted production Actual production Materials: Standard price per pound Standard pounds per completed unit Actual pounds purchased and used in production Actual price paid for materials Labor: Standard hourly labor rate Standard hours allowed per completed unit Actual labor hours worked Actual total labor costs Overhead: Actual and budgeted fixed overhead Standard variable overhead rate Actual variable overhead costs Overhead is applied based on standard labor hours. 1,000 units 980 units Favorable Unfavorable $2.00 12 11,800 $23,000 $14.00 per hour 4.5 4,560 $62,928 $27,000 $3.50 per standard labor hour $15,500 Compute the direct labor rate and time variances for Taylor Company. Enter favorable variances as negative numbers. Direct labor rate variance Direct labor time variance
Chapter1: Financial Statements And Business Decisions
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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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![**Taylor Company Production Analysis**
The following data are given for Taylor Company for the period under consideration:
### Production Data
- **Budgeted production:** 1,000 units
- **Actual production:** 980 units
### Materials Data
- **Standard price per pound:** $2.00
- **Standard pounds per completed unit:** 12 pounds
- **Actual pounds purchased and used in production:** 11,800 pounds
- **Actual price paid for materials:** $23,000
### Labor Data
- **Standard hourly labor rate:** $14.00 per hour
- **Standard hours allowed per completed unit:** 4.5 hours
- **Actual labor hours worked:** 4,560 hours
- **Actual total labor costs:** $62,928
### Overhead Data
- **Actual and budgeted fixed overhead:** $27,000
- **Standard variable overhead rate:** $3.50 per standard labor hour
- **Actual variable overhead costs:** $15,500
**Note:** Overhead is applied based on standard labor hours.
### Variance Analysis
You need to compute the direct labor rate and time variances for Taylor Company. Use the formulae below and ensure to enter favorable variances as negative numbers.
**Direct Labor Rate Variance:** \
Direct labor rate variance is calculated as:
\[ \text{Direct Labor Rate Variance} = ( \text{Actual Labor Rate} - \text{Standard Labor Rate}) \times \text{Actual Labor Hours Worked} \]
**Direct Labor Time Variance:** \
Direct labor time variance is calculated as:
\[ \text{Direct Labor Time Variance} = ( \text{Actual Labor Hours Worked} - \text{Standard Labor Hours Allowed for Actual Production} ) \times \text{Standard Labor Rate} \]
You will need to insert your computed values and specify if they are favorable (negative) or unfavorable (positive) in the provided fields.
- **Direct labor rate variance:** ________
- **Direct labor time variance:** ________
This will help in understanding the efficiency and cost management of the labor force within the company.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F99841818-3e63-4cd7-8a61-2b301a3c8330%2F1c16727d-ad93-4086-837b-2d89a2dd3dbc%2Fhwzcyi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Taylor Company Production Analysis**
The following data are given for Taylor Company for the period under consideration:
### Production Data
- **Budgeted production:** 1,000 units
- **Actual production:** 980 units
### Materials Data
- **Standard price per pound:** $2.00
- **Standard pounds per completed unit:** 12 pounds
- **Actual pounds purchased and used in production:** 11,800 pounds
- **Actual price paid for materials:** $23,000
### Labor Data
- **Standard hourly labor rate:** $14.00 per hour
- **Standard hours allowed per completed unit:** 4.5 hours
- **Actual labor hours worked:** 4,560 hours
- **Actual total labor costs:** $62,928
### Overhead Data
- **Actual and budgeted fixed overhead:** $27,000
- **Standard variable overhead rate:** $3.50 per standard labor hour
- **Actual variable overhead costs:** $15,500
**Note:** Overhead is applied based on standard labor hours.
### Variance Analysis
You need to compute the direct labor rate and time variances for Taylor Company. Use the formulae below and ensure to enter favorable variances as negative numbers.
**Direct Labor Rate Variance:** \
Direct labor rate variance is calculated as:
\[ \text{Direct Labor Rate Variance} = ( \text{Actual Labor Rate} - \text{Standard Labor Rate}) \times \text{Actual Labor Hours Worked} \]
**Direct Labor Time Variance:** \
Direct labor time variance is calculated as:
\[ \text{Direct Labor Time Variance} = ( \text{Actual Labor Hours Worked} - \text{Standard Labor Hours Allowed for Actual Production} ) \times \text{Standard Labor Rate} \]
You will need to insert your computed values and specify if they are favorable (negative) or unfavorable (positive) in the provided fields.
- **Direct labor rate variance:** ________
- **Direct labor time variance:** ________
This will help in understanding the efficiency and cost management of the labor force within the company.
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