Question 2 . The Walkabout Corporation manufactures boomerangs (its only product

Question

Question 2. The Walkabout Corporation manufactures boomerangs (its only product). The company’s standards for manufacturing boomerangs are as follows:

Standard direct labor rate per hour

$ 18.50 per hour

Standard direct labor hours per boomerang

0.4 hours

During the month of January, the company produced 1,800 boomerangs. Actual production data for the month follows:

Actual direct labor hours worked

700 hours

Actual direct labor cost incurred

$ 14,000

Part A. Calculate the labor rate variance for the month. Is it favorable or unfavorable?

Part B. Calculate the labor efficiency variance for the month. Is it favorable or unfavorable?

Standard direct labor rate per hour

$ 18.50 per hour

Standard direct labor hours per boomerang

0.4 hours

Explanation / Answer

Particulars Standard Actual Hours Rate amount Hours Rate amount Labour                  720.00               18.5000            13,320.00                  700.00                    20.00            14,000.00 Actual output              1,800.00 Labour hrs reqd(1,800*.4)                  720.00 DLRV= (SR-AR)AH DLRV= (18.50 - 20)700 DLRV= 1,050 U DLEV = (SH-AH)SR DLEV = (720 - 700)18.50 DLEV = 370 F

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.