Exercise 23-9 (Part Level Submission) You have been given the following informat

Question

Exercise 23-9 (Part Level Submission)

You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.

The following is a variance report for the most recent period of operations.

Variances

Costs

Total Standard Cost

Price

Quantity

What was the actual rate paid per direct labor hour? (Round answer to 2 decimal places, e.g. 1.25.)

Standard Cost Card Direct materials (9 pounds at $4 per pound) $36.00 Direct labor (0.80 hours at $7) 5.60 Variable overhead (0.80 hours at $3 per hour) 2.40 Fixed overhead (0.80 hours at $8 per hour) 6.40 $50.40

Explanation / Answer

Workings:

Direct labor quantity variance = Actual hours x Standard rate - Standard hours x Standard rate

6,600 U = (Actual hours x $ 7) - $ 63,314

Actual hours = 9,987.71

Direct labor price variance = Actual hours x Actual rate - Actual hours x Standard rate

4,200 U= 9,987.71 x (Actual rate - $ 7)

Actual rate paid per direct labor hour = $ 7.42 per hour

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