Direct Labor Variances La Batre Bicycle Company manufactures commuter bicycles f

Question

Direct Labor Variances La Batre Bicycle Company manufactures commuter bicycles from recycled materials. The following data for July of the current year are available Quantity of direct labor used Actual rate for direct labor Bicycles completed in April Standard direct labor per bicycle Standard rate for direct labor a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance b. How much direct labor should be debited to Work in Process? 800 hrs. $14.3 per hr 380 bicycles 2 hrs. $14.6 per hr. Favorable Unfavorable

Explanation / Answer

a Direct labor rate variance=800*(14.3-14.6)= $-240 Favorable Direct labor time variance=14.6*(800-380*2)= $584 Unfavorable Total direct labor cost variance=(800*14.3)-(380*2*14.6)= $344 Unfavorable b Direct labor debited to work in process=380*2*14.6= $11096

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