Provence Bicycle Company manufactures road bikes. The following data for Septemb

Question

Provence Bicycle Company manufactures road bikes. The following data for September of the current year are available:
Quantity of direct Labor used: 650 hrs
Actual rate for direct labor: $14/hr
Bicycles completed in September: 280
Standard direct labor per bicycle: 2.25 hrs
standard rate for direct labor: $14.20/hr

a. Determine the direct labor rate variance and direct labor time variance. Use the minus sign to enter favorable variances as negative numbers.

Rate variance:$

Time variance:$

Total direct labor cost variance:$

b. How much direct labor should be debited to Work in Process?$

Explanation / Answer

a. Determine the direct labor rate variance and direct labor time variance. Use the minus sign to enter favorable variances as negative numbers. Rate variance = AH(AR-SR) = 650*(14 – 14.20) = -130, which is 130 favorable Time variance = SR(AH-SH) =14.20*(650 – 280*2.25) = 14.20*(650 – 630) = 284, which is 284 unfavorable Total direct labor cost variance = -130 + 284 = 154, which is 154 unfavorable b. How much direct labor should be debited to Work in Process?$ 650*14 = $9100 is debited to work in process

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