Wholesome Burger, Inc. budgeted 25,000 direct labor hours for producing 100,000 units. The standard direct labor rate is $6 per hour. During March, the company used 30,000 hours for producing 80,000 units and paid $6.25 per hour. Calculate the direct labor rate 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.
Wholesome Burger, Inc. budgeted 25,000 direct labor hours for producing 100,000
units. The standard direct labor rate is $6 per hour. During March, the company
used 30,000 hours for producing 80,000 units and paid $6.25 per hour. Calculate
the direct labor rate variance.
Wholesome Burger, Inc. budgeted 25,000 direct labor hours for producing 100,000
units. The standard direct labor rate is $6 per hour. During March, the
We discuss how to calculate the direct labor rate variance and the
direct labor efficiency variance. The direct labor rate variance
represents the difference between the actual direct labor rate and
the standard direct labor rate, with actual labor hours held constant.
The direct labor efficiency variance represents the difference
between the actual number of labor hours used and the standard
number of labor hours allowed for the actual volume of output, with
the standard labor rate held constant.
company
used 30,000 hours for producing 80,000 units and paid $6.25 per hour. Calculate
the direct labor efficiency variance.
In its latest production, Vero Corp. calculated a favorable direct labor rate variance
of $4,500 and an unfavorable direct labor efficiency variance of $3,750. What is the
direct labor spending variance?
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