value: 5.00 points Delmar Inc. uses a standard cost system. Labor standards are

Question

value: 5.00 points Delmar Inc. uses a standard cost system. Labor standards are 2.1 hours per widget at $8.20 per hour. During August, Delmar Inc. paid its workers $136,530 for 16,400 hours.Delmar Inc. produced 8,700 widgets during August a. Calculate the direct labor rate variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable"·"Unfavorable", or "Nono" for no effect (ie, zero variance).) e Variance b. Calculate the direct labor efficiency variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.o., zero variance).)

Explanation / Answer

a)

Actual rate is greater than standard rate. so it will be Unfavourable

b)

Actual hours is less than standard hours. so it will be Favourable

Labour rate variance = (actual Rate - Standard Rate) * Actual Quantity Labour rate variance = (($136,530/16,400) - $8.20) * 16,400 Labour rate variance = $2,050 U

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