Labor Cost Variance: The difference between the standard cost of labour estimated and the actual cost of the labor used is the Labor Cost Variance. This variance arises because of two reasons Actual man hour rate varies from the standard man hour rate and/or Actual efficiency of labor employed varies from the standard efficiency. Therefore, Labor Cost Variance is the sum of (i) Labor Rate Variance and (ii) Labor Efficiency Variance. Labor Rate Variance: The difference between the actual rate of per man hour and the standard rate of per man hour is the Labor Price Variance. Labor Efficiency Variance: The difference between actual man hours and standard man hours is the Labor Efficiency Variance. The following formulas are used to calculate Labor Cost Variance: Labor Cost Variance (LCV) = Labor Rate Variance (LRV) + Labor efficiency variance (LEV) Also, LCV= Standard Cost −Actual Cost of labor Labor Rate Variance = Standard labor cost for actual hours- Actual labor cost Labor Efficiency Variance = Standard cost of standard man hours required for actual production units- Standard cost of actual man hours worked. Labor Cost Variance gives a view of deviations from the set standards which can be either favorable or unfavorable. Direct Labour rate and Efficiency Variance

Question

Want to see the full answer?

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 23, Problem 11QS

To determine

Concept Introduction:

Labor Cost Variance: The difference between the standard cost of labour estimated and the actual cost of the labor used is the Labor Cost Variance. This variance arises because of two reasons

Actual man hour rate varies from the standard man hour rate and/or

Actual efficiency of labor employed varies from the standard efficiency.

Therefore, Labor Cost Variance is the sum of (i) Labor Rate Variance and (ii) Labor Efficiency Variance.

Labor Rate Variance:

The difference between the actual rate of per man hour and the standard rate of per man hour is the Labor Price Variance.

Labor Efficiency Variance:

The difference between actual man hours and standard man hours is the Labor Efficiency Variance.

The following formulas are used to calculate Labor Cost Variance:

Labor Cost Variance (LCV) = Labor Rate Variance (LRV) + Labor efficiency variance (LEV)

Also, LCV= Standard Cost −Actual Cost of labor

Labor Rate Variance = Standard labor cost for actual hours- Actual labor cost

Labor Efficiency Variance = Standard cost of standard man hours required for actual production units- Standard cost of actual man hours worked.

Labor Cost Variance gives a view of deviations from the set standards which can be either favorable or unfavorable.

Direct Labour rate and Efficiency Variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00

Q1: Wyatt Company had three intangible assets at the end of 2024 (end of the fiscal year): Computer software and Web development technology purchased on January 1, 2024, for $70,000. The technology is expected to have a useful life of four years. A patent purchased from R. Jay on January 1, 2024 for a cash cost of $6,000. Jay had registered the patent with the Canadian Intellectual Property Office seven years earlier on January 1, 2017. The cost of the patent is amortized over its legal life. A trademark that was internally developed and registered with the Canadian government for $13,000 on November 1, 2023. Management decided that the trademark has an indefinite life. Required: 1. What is the acquisition cost of each intangible asset? tech 70k patent 6k trademark 13k 2. Compute the amortization of each intangible asset at December 31, 2024. The company does not use contra accounts. (Round the final answers to the nearest whole dollar.) tech 17.5k…

Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable The Lexington Group Unadjusted Trial Balance May 31, 2016 Debit Balances Credit Balances 20,350 37,000 1,100 200 171,175 36,000 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

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 23, Problem 11QS

To determine

Concept Introduction:

Labor Cost Variance: The difference between the standard cost of labour estimated and the actual cost of the labor used is the Labor Cost Variance. This variance arises because of two reasons

Actual man hour rate varies from the standard man hour rate and/or

Actual efficiency of labor employed varies from the standard efficiency.

Therefore, Labor Cost Variance is the sum of (i) Labor Rate Variance and (ii) Labor Efficiency Variance.

Labor Rate Variance:

The difference between the actual rate of per man hour and the standard rate of per man hour is the Labor Price Variance.

Labor Efficiency Variance:

The difference between actual man hours and standard man hours is the Labor Efficiency Variance.

The following formulas are used to calculate Labor Cost Variance:

Labor Cost Variance (LCV) = Labor Rate Variance (LRV) + Labor efficiency variance (LEV)

Also, LCV= Standard Cost −Actual Cost of labor

Labor Rate Variance = Standard labor cost for actual hours- Actual labor cost

Labor Efficiency Variance = Standard cost of standard man hours required for actual production units- Standard cost of actual man hours worked.

Labor Cost Variance gives a view of deviations from the set standards which can be either favorable or unfavorable.

Direct Labour rate and 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 23, Problem 11QS

To determine

Concept Introduction:

Labor Cost Variance: The difference between the standard cost of labour estimated and the actual cost of the labor used is the Labor Cost Variance. This variance arises because of two reasons

Actual man hour rate varies from the standard man hour rate and/or

Actual efficiency of labor employed varies from the standard efficiency.

Therefore, Labor Cost Variance is the sum of (i) Labor Rate Variance and (ii) Labor Efficiency Variance.

Labor Rate Variance:

The difference between the actual rate of per man hour and the standard rate of per man hour is the Labor Price Variance.

Labor Efficiency Variance:

The difference between actual man hours and standard man hours is the Labor Efficiency Variance.

The following formulas are used to calculate Labor Cost Variance:

Labor Cost Variance (LCV) = Labor Rate Variance (LRV) + Labor efficiency variance (LEV)

Also, LCV= Standard Cost −Actual Cost of labor

Labor Rate Variance = Standard labor cost for actual hours- Actual labor cost

Labor Efficiency Variance = Standard cost of standard man hours required for actual production units- Standard cost of actual man hours worked.

Labor Cost Variance gives a view of deviations from the set standards which can be either favorable or unfavorable.

Direct Labour rate and 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 23, Problem 11QS

To determine