What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...
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![### Direct Labor Variances
**Bellingham Company** produces a product that requires **3 standard direct labor hours per unit** at a standard hourly rate of **$21.00 per hour**. A total of **16,000 units** were produced, using **62,200 hours** at an hourly rate of **$19.55 per hour**.
This information has been compiled in a Microsoft Excel Online file. To proceed with the analysis, please open the spreadsheet and input your answers to the given questions.
**Open Spreadsheet** [Link or button to open]
#### Variance Analysis
What are the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
- **Direct labor rate variance**: $_________ **Favorable** ✔
- **Direct labor time variance**: $_________ **Unfavorable** ✔
- **Direct labor cost variance**: $_________ **Unfavorable** ✔
To find these variances, consider the following formulas:
- **Direct Labor Rate Variance**:
\[ \text{(Actual Hourly Rate - Standard Hourly Rate) × Actual Hours} \]
- **Direct Labor Time Variance**:
\[ \text{(Actual Hours - Standard Hours) × Standard Hourly Rate} \]
- **Direct Labor Cost Variance**:
\[ \text{Direct Labor Rate Variance + Direct Labor Time Variance} \]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F913701f4-8f4f-42af-b303-32b9b8aba513%2F11456b4e-c194-41b9-a35c-dddc10cbb249%2Fx7iqh2k_processed.png&w=3840&q=75)
Transcribed Image Text:### Direct Labor Variances
**Bellingham Company** produces a product that requires **3 standard direct labor hours per unit** at a standard hourly rate of **$21.00 per hour**. A total of **16,000 units** were produced, using **62,200 hours** at an hourly rate of **$19.55 per hour**.
This information has been compiled in a Microsoft Excel Online file. To proceed with the analysis, please open the spreadsheet and input your answers to the given questions.
**Open Spreadsheet** [Link or button to open]
#### Variance Analysis
What are the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
- **Direct labor rate variance**: $_________ **Favorable** ✔
- **Direct labor time variance**: $_________ **Unfavorable** ✔
- **Direct labor cost variance**: $_________ **Unfavorable** ✔
To find these variances, consider the following formulas:
- **Direct Labor Rate Variance**:
\[ \text{(Actual Hourly Rate - Standard Hourly Rate) × Actual Hours} \]
- **Direct Labor Time Variance**:
\[ \text{(Actual Hours - Standard Hours) × Standard Hourly Rate} \]
- **Direct Labor Cost Variance**:
\[ \text{Direct Labor Rate Variance + Direct Labor Time Variance} \]
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