eBook Direct Labor Variances The following data relate to direct labor costs for

Question

eBook Direct Labor Variances The following data relate to direct labor costs for the production of smart tablets Actual 2,250 hrs. at $15.60 $35,100 Standard 2,290 hrs. at $15.30 $35,037 a. Determine the the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, positive amount. Rate variance Time variance Total direct labor cost varlance b. Which of the following statements regarding causes of these labor variances is false? Previous Save and Exit Submit Assignment for Gra

Explanation / Answer

Answer to Part a.

Rate Variance = (Actual Rate per Hour – Standard Rate per Hour)   * Actual Hours
Rate Variance = ($15.60 - $15.30) * 2,250
Rate Variance = $675 (Unfavourable)

Time Variance = (Actual Direct Labor Hours – Standard Direct Labor Hours) * Standard Rate per Hour
Time Variance = (2,250 – 2,290) * $15.30
Time Variance = $612 (Favourable)

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