Direct Labor Variances Tip Top Corp. produces a product that requires 10.0 stand

Question

Direct Labor Variances

Tip Top Corp. produces a product that requires 10.0 standard hours per unit at a standard hourly rate of $15.00 per hour. If 5,800 units required 60,300 hours at an hourly rate of $14.70 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

a. Direct labor rate variance $
Select
Favorable
Unfavorable
Item 2

b. Direct labor time variance $
Select
Favorable
Unfavorable
Item 4

c. Direct labor cost variance $
Select
Favorable
Unfavorable
Item 6

Explanation / Answer

Workings:

a. Direct labor rate variance      18,090 favourable b. Direct labor time variance     34,500 unfavourable c. Direct labor cost variance       16,410 unfavourable

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