Problem 10-180 The following labor standards have been ... The following labor s
ID: 2563789 • Letter: P
Question
Problem 10-180 The following labor standards have been ...
The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
What is the labor rate variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
What is the labor efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
The following labor standards have been established for a particular product:
Explanation / Answer
a) Labor Rate variance = (AR-SR)*AH = 855 (f) AR = Actual Rate per hour = 156000/1500 = $20.8 SR = Standard Rate per hour = $20.7 AH = Actual hours = 7500 F= Favourable U = Unfavourable Labor Rate variance = (20.8-20.7)*7500 = $750 (U) b) Labor Efficiency variance = (AH-SH)*SR AH = Actual hours = 7500 SH = Standard Hours = 4.9*1500 = 7350 SR = Standard Rate per hour = $20.7 F= Favourable U = Unfavourable Labor Efficiency variance = (7500-7350)*20.7 = $3105 (U)
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