araty rrice-Actaal City standard Actual ) ( x 0.5 (AP-SP) AG 75, ooo,, o,s 37,50
ID: 2570181 • Letter: A
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araty rrice-Actaal City standard Actual ) ( x 0.5 (AP-SP) AG 75, ooo,, o,s 37,500 unfavorable 3. Kato Corporation makes a product that has the following direct labor standards: hours per unit Standard direct labor-hours Standard direct labor rate 0.2 $21.00 per hour $4.20 per unit Standard cost The company budgeted for production of 2,100 units in October, but actual production was 1,900 units. The company used 410 direct labor-hours to produce this output. The actual direct labor rate was $20.60 per hour. What is the labor rate variance and efficiency variance for October are?Explanation / Answer
Standard Cost Per unit Standard Time Standard Rate Standard Cost per unit 0.2 $ 21.00 $ 4.20 Hrs Per Hours Calculation of Standard Cost for 1900 units Standard Time Standard Rate Standard Cost per unit 380 $ 21.00 $ 7,980.00 Hrs (1900 X0.20) Per Hours Actual Cost for 1900 Units Actual Time Standard Rate Standard Cost per unit 410 $ 20.60 $ 8,446.00 Hrs (1900 X0.20) Per Hours Labour Cost Variance = Standard Cost of Labour - Actual Cost of Labour Labour Cost Variance = $ 7,980.00 '-' $ 8,446.00 Labour Cost Variance = $ 466.00 (Unfavorable) Labour Rate Variance = (Actual Rate - Standard Rate) X Actual Hours Labour Rate Variance = ( $ 20.60 '-' $ 21.00 ) X $ 410.00 Labour Rate Variance = $ 0.40 X $ 410.00 Labour Rate Variance = 164 (favorable) Labour Efficiency Variance = (Actual Hours - Standard Hours ) X Standard Rate Labour Efficiency Variance = ( 410.00 '-' 380.00 ) X $ 21.00 Labour Efficiency Variance = $ 30.00 X $ 21.00 Labour Efficiency Variance = 630 (Unfavorable)
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