The Fellowes Company has developed standards for direct labor. During June, 75 units were scheduled and 100 were produced. Data related to direct labor are: Standard hours allowed 4 hours per unit Standard wages allowed $ 5.00 per hour Actual direct labor 410 hours (total cost $2,009) What is the direct labor rate variance for June?
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.
The Fellowes Company has developed standards for direct labor. During June, 75 units were scheduled and 100 were produced. Data related to direct labor are:
| Standard hours allowed | 4 | hours per unit |
|---|---|---|
| Standard wages allowed | $ 5.00 | per hour |
| Actual direct labor | 410 | hours (total cost $2,009) |
What is the direct labor rate variance for June?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
