Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour. What are the following direct labor variances? Enter favorable variances as negative numbers a. Rate variance $ ? Favorable or Unfavorable? b. Time variance $ ? Favorable or Unfavorable? c. Cost variance $ ? Favorable or Unfavorable?
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.
Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour. What are the following direct labor variances?
Enter favorable variances as negative numbers
| a. Rate variance | $ ? | Favorable or Unfavorable? |
| b. Time variance | $ ? | Favorable or Unfavorable? |
| c. Cost variance | $ ? | Favorable or Unfavorable? |
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