The manufacturing of a product requires a standard of 3 direct labour hours at a standard wage rate of 7 per direct labour hour. The 2000 units of production actually required 5,400 hours at a cost of 8.5 per hour. REQUIRED: Compute the labour rate and labour efficiency variances.

The manufacturing of a product requires a standard of 3 direct labour hours at a standard wage rate of 7 per direct labour hour. The 2000 units of production actually required 5,400 hours at a cost of 8.5 per hour. REQUIRED: Compute the labour rate and labour efficiency variances.

Name: The manufacturing of a product requires a standard of 3 direct labour
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Description: The manufacturing of a product requires a standard of 3 direct labour hours at a standard wagerate of 7 per direct labour hour. The 2000 units of production actually required 5,400 hours at a cost of 8.5per hour.REQUIRED: Compute the labour rate and

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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[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $9 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 40.00 45.00 27.00 $112.00 Fixed Cost per Month $ 350,000 $ 400,000 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,000 units and incurred the following costs: $ 27.00 $18.00 a. Purchased 160,000 pounds of raw materials at a cost of $6.50 per pound. All of this material was used in production. b. Direct-laborers…
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