Direct Labor Rate and Efficiency Variances The Puffalump, Inc., prepared the fol
ID: 2447340 • Letter: D
Question
Direct Labor Rate and Efficiency Variances
The Puffalump, Inc., prepared the following standard costs for the production of one decorative pillow:
Actual production costs for the production of 1,000 decorative pillows required 2,000 pounds of decorating at a cost of $1.95 per pound and 1,950 labor hours at $15.65 per hour.
Required:
If required, round your answers to the nearest cent. Enter all amounts as positive numbers.
A. Calculate the direct labor rate variance.
B. Calculate the direct labor efficiency variance.
Direct materials 1.3 pounds of stuffing @ $2 per lb Direct labor 2 hours of assembly @ $15 per hrExplanation / Answer
Rate variance = AH(AR -SR)
= 1950 ( 15.65 - 15)
= 1950 * .65
= 1267.5 (U)
Efficiency variance= SR (AH -SH)
= 15 [1950 - (2* 1000)]
= 15 [1950 - 2000]
= 15 * -50
= - 750(F)
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