Direct labor rate variance- Direct labor rate variance is the variance which measures the difference between standard rate and actual hourly rate paid.. If actual rate paid is more than the standard rate then the variance is unfavorable and if actual rate paid is less than the standard rate then the variance is favorable. It is calculated as follows- D i r e c t l a b o r r a t e v a r i a n c e = ( S t a n d a r d r a t e − A c t u a l r a t e ) * A c t u a l h o u r s w o r k e d Direct labor efficiency variance- Direct labor efficiency variance is the variance which measures the difference between standard hours allowed and actual hours taken for the work done. If actual hours are more than the standard hours allowed then the variance is unfavorable and if actual hours are less than the standard hours allowed then the variance is favorable. It is calculated as follows- D i r e c t l a b o r e f f i c i e n c y v a r i a n c e = ( S t a n d a r d h o u r s − A c t u a l h o u r s ) * S t a n d a r d r a t e To compute: Direct labor rate variance and direct labor efficiency variance

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Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 15, Problem 15.4ME

To determine

Concept Introduction:

Direct labor rate variance-

Direct labor rate variance is the variance which measures the difference between standard rate and actual hourly rate paid.. If actual rate paid is more than the standard rate then the variance is unfavorable and if actual rate paid is less than the standard rate then the variance is favorable. It is calculated as follows-

Direct labor rate variance = (Standard rate−Actual rate)Actual hours worked

Direct labor efficiency variance-

Direct labor efficiency variance is the variance which measures the difference between standard hours allowed and actual hours taken for the work done. If actual hours are more than the standard hours allowed then the variance is unfavorable and if actual hours are less than the standard hours allowed then the variance is favorable. It is calculated as follows-

Direct labor efficiency variance = (Standard hours−Actual hours)Standard rate

To compute:

Direct labor rate variance and direct labor efficiency variance

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Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 15, Problem 15.4ME

To determine

Concept Introduction:

Direct labor rate variance-

Direct labor rate variance is the variance which measures the difference between standard rate and actual hourly rate paid.. If actual rate paid is more than the standard rate then the variance is unfavorable and if actual rate paid is less than the standard rate then the variance is favorable. It is calculated as follows-

Direct labor rate variance = (Standard rate−Actual rate)Actual hours worked

Direct labor efficiency variance-

Direct labor efficiency variance is the variance which measures the difference between standard hours allowed and actual hours taken for the work done. If actual hours are more than the standard hours allowed then the variance is unfavorable and if actual hours are less than the standard hours allowed then the variance is favorable. It is calculated as follows-

Direct labor efficiency variance = (Standard hours−Actual hours)Standard rate

To compute:

Direct labor rate variance and direct labor efficiency variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 15, Problem 15.4ME

To determine

Concept Introduction:

Direct labor rate variance-

Direct labor rate variance is the variance which measures the difference between standard rate and actual hourly rate paid.. If actual rate paid is more than the standard rate then the variance is unfavorable and if actual rate paid is less than the standard rate then the variance is favorable. It is calculated as follows-

Direct labor rate variance = (Standard rate−Actual rate)Actual hours worked

Direct labor efficiency variance-

Direct labor efficiency variance is the variance which measures the difference between standard hours allowed and actual hours taken for the work done. If actual hours are more than the standard hours allowed then the variance is unfavorable and if actual hours are less than the standard hours allowed then the variance is favorable. It is calculated as follows-

Direct labor efficiency variance = (Standard hours−Actual hours)Standard rate

To compute:

Direct labor rate variance and direct labor efficiency variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 15, Problem 15.4ME

To determine