Direct labor variances: Direct labor variances refer to the difference between the standard direct labor cost and actual direct labor cost incurred. Direct labor cost variances are categorized into following categories: Direct labor Rate variance : this variance shows the difference of standard rate and actual rate of labor. The formula to calculate this variance is as follows: Direct labor rate variance = ( Actual rate – Standard rate ) × Actual hours Direct labor efficiency variance: this variance shows the difference of standard usage and actual usage of labor. The formula to calculate this variance is as follows: Direct labor efficiency variance = ( Actual hours – Standard hours ) × Standard rate Direct labor cost variance: this variance shows the difference of standard cost and actual cost of labor. The formula to calculate this variance is as follows: Direct labor cost variance = Direct labor rate variance + Direct labor efficiency variance Or Direct Labor cost variance = Actual Labor cost − Standard Labor Cost To Indicate: The effect of unfavorable labor efficiency variance on the variable overhead 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 9, Problem 16Q

To determine

Concept Introduction:

Direct labor variances: Direct labor variances refer to the difference between the standard direct labor cost and actual direct labor cost incurred. Direct labor cost variances are categorized into following categories:

Direct labor Rate variance: this variance shows the difference of standard rate and actual rate of labor. The formula to calculate this variance is as follows:

Direct labor rate variance = (Actual rate – Standard rate) ×Actual hours

Direct labor efficiency variance: this variance shows the difference of standard usage and actual usage of labor. The formula to calculate this variance is as follows:

Direct labor efficiency variance = (Actual hours – Standard hours)×Standard rate

Direct labor cost variance: this variance shows the difference of standard cost and actual cost of labor. The formula to calculate this variance is as follows:

Direct labor cost variance = Direct labor rate variance + Direct labor efficiency variance

Or

Direct Labor cost variance = Actual Labor cost − Standard Labor Cost

To Indicate:

The effect of unfavorable labor efficiency variance on the variable overhead efficiency variance.

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Financial Accounting MCQ

The best estimate of the total variable cost per unit is

The following data pertains to the direct materials cost for the month of October: Standard costs: 5,000 units allowed at $20 each Actual costs: 5,050 units input at $19 each What is the direct materials efficiency (quantity) variance? a. $950 favorable b. $950 unfavorable c. $1,000 favorable d. $1,000 unfavorable e. $50 unfavorable

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 9, Problem 16Q

To determine

Concept Introduction:

Direct labor variances: Direct labor variances refer to the difference between the standard direct labor cost and actual direct labor cost incurred. Direct labor cost variances are categorized into following categories:

Direct labor Rate variance: this variance shows the difference of standard rate and actual rate of labor. The formula to calculate this variance is as follows:

Direct labor rate variance = (Actual rate – Standard rate) ×Actual hours

Direct labor efficiency variance: this variance shows the difference of standard usage and actual usage of labor. The formula to calculate this variance is as follows:

Direct labor efficiency variance = (Actual hours – Standard hours)×Standard rate

Direct labor cost variance: this variance shows the difference of standard cost and actual cost of labor. The formula to calculate this variance is as follows:

Direct labor cost variance = Direct labor rate variance + Direct labor efficiency variance

Or

Direct Labor cost variance = Actual Labor cost − Standard Labor Cost

To Indicate:

The effect of unfavorable labor efficiency variance on the variable overhead efficiency variance.

Expert Solution & Answer

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Check out a sample textbook solution

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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 9, Problem 16Q

To determine

Concept Introduction:

Direct labor variances: Direct labor variances refer to the difference between the standard direct labor cost and actual direct labor cost incurred. Direct labor cost variances are categorized into following categories:

Direct labor Rate variance: this variance shows the difference of standard rate and actual rate of labor. The formula to calculate this variance is as follows:

Direct labor rate variance = (Actual rate – Standard rate) ×Actual hours

Direct labor efficiency variance: this variance shows the difference of standard usage and actual usage of labor. The formula to calculate this variance is as follows:

Direct labor efficiency variance = (Actual hours – Standard hours)×Standard rate

Direct labor cost variance: this variance shows the difference of standard cost and actual cost of labor. The formula to calculate this variance is as follows:

Direct labor cost variance = Direct labor rate variance + Direct labor efficiency variance

Or

Direct Labor cost variance = Actual Labor cost − Standard Labor Cost

To Indicate:

The effect of unfavorable labor efficiency variance on the variable overhead 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 9, Problem 16Q

To determine