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ID: 2510475 • Letter: C
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CengageNOWv2 Online X takeAssignmentMain.do?invoker- assignments8ta n Locator= assignment-take&inprogress;=false Chapter 13 (standard costs) 1. EX.13-20 Algo 2. EX 13-23 Ago eBock Direct Labor Variances The following data relate to direct labor costs for the production of smart tablets. Actual 4,010 hrs, at $14.60 $58,546 Standard 4,070 hrs. at$14.40 58,608 a. Determine the the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount Rate variance Time variance Total direct labor cost variance 802 864 -62 Unfavorable Variance Favorable Variance Favorable Variance b. Which of the following statements regarding causes of these labor variances is false? The cost savings obtained through more faster production times were offset by higher wage costs. The workers produced the smart tablets more quickly than expected. The workers were more highly paid than expected. The cost savings obtained through more faster production times were offset by higher wage costs. The cost savings obtained through lower wage costs were offset by slower production times. Previous Progress: 2/2 items asignment Score: 0.0% Save and Exit Submit Assignment for Grading 1:16 PM 4/4/2018Explanation / Answer
Answer: The statement that “the cost savings obtained through lower wage costs were offset by slower production times” is false.
An unfavourable labor rate variance denotes higher wage costs while a favourable time variance denotes faster production times.
Thus, the first statement, the workers produced the smart tablets more quickly than expected is true. The second statement that the workers were more highly paid than expected is also true. The third statement that the cost savings obtained through more faster production times were offset by higher wage costs is also true. However, the fourth statement that the cost savings obtained through lower wage costs were offset by slower production times is false since wage costs were not lower but higher and production times were also not slower but faster.
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