Concept explainers
Determining Actual,
For each of the following independent cases, fill in the missing amounts:

Concept introduction:
Rate variance:
It is referred to the amount which is computed by multiplying the number of actual hours with the difference between actual rate and standard rate per hour of direct labour.
Time variance:
It is referred to the amount which is computed by multiplying the standard rate per hours with the difference between the number of actual hours and standard hours of direct labour.
Direct labour spending variance:
This is calculated by combining material price variance and material quantity variance.
To compute:
The missing values for direct labor variances.
Answer to Problem 18E
Particulars | Casey Co. | Kevin Inc. | Jess Co. | Valerie Inc. |
Unit produced | ||||
Standard hours per unit | ||||
Standard hours | ||||
Standard rate per hour | ||||
Actual hours worked | ||||
Actual labor cost | ||||
Direct labor rate variance | ||||
Direct labor efficiency variance |
Explanation of Solution
Casey Co.
Calculation of standard hours
Unit produced
Standard hours per unit
Standard hours
Calculation of direct labour efficiency variance:
Standard hours
Actual hours
Standard rate per hour
Calculation of Actual Labour cost:
Labour rate per hour is
Where,
Kevin Inc.
Calculation of units produced
Standard hours
Standard hours per unit
Unit produced
Calculation of standard rate per hour
Standard hours
Actual hours
Direct labour efficiency variance
Let standard rate per hour = X
Calculation of Actual Labour cost:
Actual hours
Standard rate per hour
Direct labour rate variance
Let actual rate per hr be X
Labour rate per hour is
Where,
Jess co.
Calculation of standard hour per unit:
Units produced
Standard hours
Calculation of actual hours worked:
Direct labour rate variance
Actual labour cost
Standard rate per hour
Actual hours
So, Actual hour is
Calculation of direct labour efficiency variance:
Standard hours
Actual hours
Standard rate per hour
So, direct labour efficiency variance is
Valerie Inc.
Calculation of standard hours:
Actual hours
Standard rate per hour
Direct labour efficiency variance
Standard hours = X
So, Standard hour is
Calculation of standard hour per unit:
Units produced
Standard hours
So, Standard hour per unit is
Calculation of direct labour rate variance:
Actual hours
Standard rate per hour
Actual rate per hour
So, Direct labour rate variance is
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