Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products. 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. 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. Requirement 1- To compute: Flexed budget amount and Budget variance .

Question

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Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

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Superior Manufacturing uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to production jobs. For 2024, the company's budget includes estimated manufacturing overhead of $720,000 and estimated direct labor hours of 20,000. In March, the production department completed Job #304, which required $8,200 in direct materials and $4,500 in direct labor (representing 250 hours at $18 per hour). The cost accountant needs to determine the predetermined overhead rate, the manufacturing overhead allocated to Job #304, and the total cost of this job.

Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

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Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

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Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

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Answer 5

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

Answer 6

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

Answer 7

Chapter 15, Problem 15.9E

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

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.

Requirement 1-

To compute:

Flexed budget amount and Budget variance.

Answer 8

Expert Solution

Answer to Problem 15.9E

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Given,

Direct labor original budget= $1,800
Direct labor actual budget= $1,888
Production rate = 20 books
Pay rates = $12 per hour
Unit of actual bound books= 2,860 books
Actual working hours = 160 hours

Flexed budget amount = Units of actual bound booksProduction books* Pay ratesFlexed budget amount =2,860 books20 books per hours * $12 per hoursFlexed budget amount = $1,716

Budget variance = Actual cost − Flexed budget amountBudget variance = $1,888 − $1,716Budget variance = $172 U

Conclusion:

Thus, Flexed budget amount and Budget variance are computed.

Answer 13

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

Answer 14

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 2-

To calculate:

Direct labor efficiency variance.

Answer 15

Expert Solution

Answer to Problem 15.9E

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Direct labor efficiency variance-

Given, actual hours worked = 160 hours

Standard hours = Units of actual bound booksProduction booksStandard hours =2,860 books20 books per hours Standard hours = 143 hours

Direct labor efficiency variance is calculated as follows-

Direct labor efficiency variance=(Standard hours allowed–Actual hours worked)Direct labor efficiency variance=(143 hours – 160 hours) Direct labor efficiency variance =17 hours U

Conclusion:

Since standard hours are less than the actual works worked, hence variance is unfavorable.

Answer 20

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Conclusion:

Since, standard rate is more than the actual rate, variance is favorable.

Answer 21

To determine

Concept Introduction:

Direct Labor - Direct labor is the labor cost of the employees who convert materials into finished products.

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.

Requirement 3-

To calculate:

Direct labor rate variance.

Answer 22

Expert Solution

Answer to Problem 15.9E

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Given,

Standard rate = $12
Actual hours = 160 hours

Actual rate = Actual cost / Actual hoursActual rate = $1,888 / 160Actual rate = $11.80

Direct labor rate variance is calculated as follows-

Direct labor rate variance = (Standard rate – Actual rate) * Actual hoursDirect labor rate variance = ($12 − $11.80) * 160 hoursDirect labor rate variance = $32 F