Under normal conditions, Sarah pays her employees $8.50 per hour, and it will take 2.80 hours of labor per pair of shoes. During August, Sole Purpose Shoe Company incurred actual direct labor costs of $65,880 for 7,320 hours of direct labor in the production of 2,100 pairs of shoes. Complete the following table, showing the direct labor variance relationships for August for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable variance, and a positive number for an unfavorable variance.
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.
Direct Labor
Under normal conditions, Sarah pays her employees $8.50 per hour, and it will take 2.80 hours of labor per pair of shoes. During August, Sole Purpose Shoe Company incurred actual direct labor costs of $65,880 for 7,320 hours of direct labor in the production of 2,100 pairs of shoes.
Complete the following table, showing the direct labor variance relationships for August for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable variance, and a positive number for an unfavorable variance.
| Actual Cost | Standard Cost | |||||||||
| Actual Hours |
X | Actual Rate |
Actual Hours |
X | Standard Rate |
Standard Hours |
X | Standard Rate |
||
| fill in the blank 8ad6b700d058ff4_1 | X | $fill in the blank 8ad6b700d058ff4_2 | fill in the blank 8ad6b700d058ff4_3 | X | $fill in the blank 8ad6b700d058ff4_4 | fill in the blank 8ad6b700d058ff4_5 | X | $fill in the blank 8ad6b700d058ff4_6 | ||
| = $fill in the blank 8ad6b700d058ff4_7 | = $fill in the blank 8ad6b700d058ff4_8 | = $fill in the blank 8ad6b700d058ff4_9 | ||||||||
| Unfavorable Direct Labor Rate Variance: |
Unfavorable Direct Labor Cost Variance: |
|||||||||
| $fill in the blank 8ad6b700d058ff4_14 | $fill in the blank 8ad6b700d058ff4_15 | |||||||||
| Unfavorable Total Direct Labor Price Variance: |
||||||||||
| $fill in the blank 8ad6b700d058ff4_18 |
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