After evaluating Null Company’s manufacturing process, management decides to est
ID: 2561542 • Letter: A
Question
After evaluating Null Company’s manufacturing process, management decides to establish standards of 2 hours of direct labor per unit of product and $16.70 per hour for the labor rate. During October, the company uses 14,000 hours of direct labor at a $236,600 total cost to produce 7,300 units of product. In November, the company uses 23,700 hours of direct labor at a $402,900 total cost to produce 7,700 units of product.
Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor cost variance for each of these two months.
After evaluating Null Company’s manufacturing process, management decides to establish standards of 2 hours of direct labor per unit of product and $16.70 per hour for the labor rate. During October, the company uses 14,000 hours of direct labor at a $236,600 total cost to produce 7,300 units of product. In November, the company uses 23,700 hours of direct labor at a $402,900 total cost to produce 7,700 units of product.
October Actual Cost Standard Cost November Actual Cost Standard CostExplanation / Answer
Actual cost Standard cost AH X AR AH X SR SH X SR 14000 X 16.9 14000 X 16.7 14600 X 16.7 236600 233800 243820 2800 10020 Direct labor rate variance 2800 Unfavorable Direct labor efficiency variance 10020 Favorable Total Direct labor variance 7220 Favorable Actual cost Standard cost AH X AR AH X SR SH X SR 23700 X 17 23700 X 16.7 15400 X 16.7 402900 395790 257180 7110 138610 Direct labor rate variance 7110 Unfavorable Direct labor efficiency variance 138610 Unfavorable Total Direct labor variance 145720 Unfavorable
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.