The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for July are shown in the following schedule. Standard Direct Labor Standard Direct Labor-Hours Allowed for Output 1,380 1,840 2,300 Worker classification Rate per Hour $60 II 55 III 45 The wage rates for each labor class increased under the terms of a new contract. The standard wage rates were not revised to reflect the new contract. The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of July were as follows. Actual Direct Labor Rate Worker classification Actual Direct Labor-Hours 1,470 1,950 2,380 per Hour $64 II III 58 46 Required: Calculate the dollar amount of the total direct labor variance for July for Matthews & Bros. and break down the total variance into the following components: a. Direct labor price and efficiency variances. b. Direct labor mix and yield variances.

The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for July are shown in the following schedule. Standard Direct Labor Standard Direct Labor-Hours Allowed for Output 1,380 1,840 2,300 Worker classification Rate per Hour $60 II 55 III 45 The wage rates for each labor class increased under the terms of a new contract. The standard wage rates were not revised to reflect the new contract. The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of July were as follows. Actual Direct Labor Rate Worker classification Actual Direct Labor-Hours 1,470 1,950 2,380 per Hour $64 II III 58 46 Required: Calculate the dollar amount of the total direct labor variance for July for Matthews & Bros. and break down the total variance into the following components: a. Direct labor price and efficiency variances. b. Direct labor mix and yield variances.

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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Question

Required A
Required B
Direct labor price and efficiency variances. (Indicate the effe
unfavorable. If there is no effect, do not select either option
Direct labor price variance
Efficiency variance

The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for July
are shown in the following schedule.
Worker
classification
Standard
Direct Labor
Rate per Hour
$60
Standard Direct
Labor-Hours Allowed
for Output
1,380
1,840
2,300
II
55
III
45
The wage rates for each labor class increased under the terms of a new contract. The standard wage rates were not revised to reflect
the new contract.
The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of July were as follows.
Actual Direct
Labor Rate
Worker
Classification
Actual Direct
per Hour
$64
Labor-Hours
1,470
II
58
1,950
2,380
III
46
Required:
Calculate the dollar amount of the total direct labor variance for July for Matthews & Bros. and break down the total variance into the
following components:
a. Direct labor price and efficiency variances.
b. Direct labor mix and yield variances.

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