Worldwide Credit Card Inc. uses standards to control the labour time involved in opening mail from cardholders and recording the enclosed remittances. Incoming mail is gathered into batches, and a standard time is set for opening and recording each batch. The labour standards relating to one batch are as follows: Per batch Total labour variance Labour rate variance Standard Hours 2.5 The record showing the time spent last week in opening batches of mail has been misplaced. However, the batch supervisor recalls that 168 batches were received and opened during the week, and the controller recalls the following variance data relating to these batches: Actual labour-hours Standard Rate $12.00 $660 U $300 F (Hint: A useful way to proceed is to work from known to unknown data, either by using the variance formulas or by using the columnar format.) Actual rate Standard Cost $30.00 Required: 1. Determine the number of actual labour-hours spent opening batches during the week. per hour 2. Determine the actual hourly rate paid to employees for opening batches last week. (Round your answer to 2 decimal places.)
Worldwide Credit Card Inc. uses standards to control the labour time involved in opening mail from cardholders and recording the enclosed remittances. Incoming mail is gathered into batches, and a standard time is set for opening and recording each batch. The labour standards relating to one batch are as follows: Per batch Total labour variance Labour rate variance Standard Hours 2.5 The record showing the time spent last week in opening batches of mail has been misplaced. However, the batch supervisor recalls that 168 batches were received and opened during the week, and the controller recalls the following variance data relating to these batches: Actual labour-hours Standard Rate $12.00 $660 U $300 F (Hint: A useful way to proceed is to work from known to unknown data, either by using the variance formulas or by using the columnar format.) Actual rate Standard Cost $30.00 Required: 1. Determine the number of actual labour-hours spent opening batches during the week. per hour 2. Determine the actual hourly rate paid to employees for opening batches last week. (Round your answer to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Worldwide Credit Card Inc. uses standards to control the labour time involved in opening mail from cardholders and recording the
enclosed remittances. Incoming mail is gathered into batches, and a standard time is set for opening and recording each batch. The
labour standards relating to one batch are as follows:
Per batch
Total labour variance
Labour rate variance
Standard
Hours
2.5
The record showing the time spent last week in opening batches of mail has been misplaced. However, the batch supervisor recalls
that 168 batches were received and opened during the week, and the controller recalls the following variance data relating to these
batches:
Actual labour-hours
Standard
Rate
$12.00
$660 U
$300 F
(Hint: A useful wa to proceed is to work from known to unknown data, either by using the variance formulas or by using the columnar
format.)
Actual rate
Standard
Cost
$30.00
Required:
1. Determine the number of actual labour-hours spent opening batches during the week.
per hour
2. Determine the actual hourly rate paid to employees for opening batches last week. (Round your answer to 2 decimal places.)
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