E11-29A (similar to) EQuestion Help Ceramics Etc. is a manutecturer ot large tlo

Question

E11-29A (similar to) EQuestion Help Ceramics Etc. is a manutecturer ot large tlower pots tor urban settings. The company has these standards (Click the ico, lo vow the standards ) ?(Click the icon to view lhe adual rosuls ) Read the requirements nen round the final vaner ce amounts to the nearest whole Requirement 1 ompute the direct labor rate varance and the direct labor efticiency verlance. Enter the vanences as postve numbers. Enter the currency ?mounts in the formulas to the nearest cen dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DL Direct labor) Begin with the direct labor rate variance. First determine the formula for the rate van nce then compute the rate variance for direct labor ? -DL rete variance

Explanation / Answer

1) Direct labour rate variance = (SR - AR) AH

= (18 - 17) 4500 = 4500 Favourable

Direct labour efficiency variance = ( SH - AH) SR

SH = 4500/2.5*2 = 3600 HOURS

HENCE DLEF = (3600 - 4500) * 18 = 16200 ADVERSE

2) Total direct labour variance = (SH*SR) - (AH*AR)

= (3600*18) - (4500*17) = 11700 ADVERSE

3) Reasons

4) Interpretation

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