4. Standard cost svstem labor variance The following computations of March labor

Question

4. Standard cost svstem labor variance The following computations of March labor variances for Sam's Supply Company are incomplete. The missing items are labeled (a) through (d). Labor rate variance = 4.800 hours x [(a)-$8.50-$350 favorable Labor efficiency variance = (b) x [(e)-5,000 hours-$() On the appropriately labeled line, identify each missing item by name (a through e) and show the missing value (a through d). Show supporting computations in the space provided. hours (d) S F or U [Choose the correct term.] e) During March, the supervisor left for vacation without arranging for a replacement. Which variances would have been most affected by this situation? Computations

Explanation / Answer

a ) = 8.42708

standard rate = 8.5

4800*(8.42708-8.5) = 350

b ) = 8.5

c ) = 4800

d) = 1700 (F)

8.5*(4800-5000)= 1700 favorable

e ) efficiency variance are more important if supervisor is not available for service

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