Labour Cost variance: The difference between the standard cost of labour estimated and the actual cost of the labour used is theLabour 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 labour employed varies from the standard efficiency. Therefore, Labour Cost Variance is the sum of (i) Labour Rate Variance and (ii) Labour Efficiency Variance. The following formulas are used to calculate LabourCost Variance: Labour Cost Variance(LCV) = Labour Rate Variance (LRV) +Labour efficiency variance (LEV) Also, LCV= Standard Cost −Actual Cost of labour Labour Cost Variance gives a view of deviations from the set standards which can be either favorable or unfavorable. The Actual Total Direct Labour Cost

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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 23, Problem 12QS

To determine

Concept Introduction:

Labour Cost variance:

The difference between the standard cost of labour estimated and the actual cost of the labour used is theLabour 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 labour employed varies from the standard efficiency.

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

The following formulas are used to calculate LabourCost Variance:

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

Also, LCV= Standard Cost −Actual Cost of labour

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

The Actual Total Direct Labour Cost

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Boston Industries completes job #842, which has a standard of 840 labor hours at a standard rate of $22.75 per hour. The job was completed in 890 hours, and the average actual labor rate was $23.10 per hour. What is the labor efficiency (quantity) variance? (A negative number indicates a favorable variance and a positive number indicates an unfavorable variance.)

Please explain the solution to this general accounting problem with accurate principles.

I am looking for the correct answer to this general accounting question with appropriate explanations.

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 12QS

To determine

Concept Introduction:

Labour Cost variance:

The difference between the standard cost of labour estimated and the actual cost of the labour used is theLabour 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 labour employed varies from the standard efficiency.

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

The following formulas are used to calculate LabourCost Variance:

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

Also, LCV= Standard Cost −Actual Cost of labour

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

The Actual Total Direct Labour Cost

Expert Solution & Answer

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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 12QS

To determine

Concept Introduction:

Labour Cost variance:

The difference between the standard cost of labour estimated and the actual cost of the labour used is theLabour 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 labour employed varies from the standard efficiency.

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

The following formulas are used to calculate LabourCost Variance:

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

Also, LCV= Standard Cost −Actual Cost of labour

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

The Actual Total Direct Labour Cost

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 12QS

To determine