The New Day Clothes Company produced 18,000 units during June of the current yea

Question

The New Day Clothes Company produced 18,000 units during June of the current year. The Cutting Department used 3,500 direct labor hours at an actual rate of $11.80 per hour. The Sewing Department used 5,800 direct labor hours at an actual rate of $12.15 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $12.00. The standard labor time for the Cutting and Sewing departments is 0.19 hour and 0.33 hour per unit, respectively, answer whether it is favorable or unfavorable

cutting department (what are the variances and answer whether it is favorable or unfavorable)

Rate variance: ?

Time variance:   ?

Total direct labor cost variance: ?

sewing department (what are the variances and answer whether it is favorable or unfavorable)

Rate variance: ?

Time variance: ?

Total direct labor cost variance:

Explanation / Answer

Direct Labor Rate Variance = (Actual Cost - Standard Cost)*Actual Hours

Direct Labor Time Variance = Standard Cost*(Actual Hours-Standard Hours)

Total Direct Labor Variance=Direct Labor Rate Variance +Direct Labor Time Variance

Cutting Department:

Direct Labor Rate Variance = 3500*(11.8-12)=-$700=$700 F

Standard Hours = Total units produces*Hour required per unit=18000*0.19=3420 hours

Direct Labor Time Variance = 12*(3500-3420)=$960 U

Total Direct Labor Variance=Direct Labor Rate Variance +Direct Labor Time Variance = $ 260 U

Sewing Department:

Direct Labor Rate Variance = 5800*(12.15-12)=$870=$870 u

Standard Hours = Total units produces*Hour required per unit=18000*0.33=5940 hours

Direct Labor Time Variance = 12*(5800-5940)=-$1680 = $1680 F

Total Direct Labor Variance=Direct Labor Rate Variance +Direct Labor Time Variance = $ 810 F

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