Use the following information for questions #13 and #14. The following data rela

Question

Use the following information for questions #13 and #14. The following data relate to labor cost for production of 7,600 cellular telephones: Actual: 5,040 hrs. at $14.20 Standard: 5,140 hrs. at $14.50 Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. 13. What is the direct labor rate variance? 14. What is the direct labor time variance? Use the following information for questions #13 and #14. The following data relate to labor cost for production of 7,600 cellular telephones: Actual: 5,040 hrs. at $14.20 Standard: 5,140 hrs. at $14.50 Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. 13. What is the direct labor rate variance? 14. What is the direct labor time variance?

Explanation / Answer

Question - 1 ..........For rate variance we take Actual hours worked and multiply with difference in rate

= AH ( AR - SR) = 5040 ( 14.20 - 14.50) = - 1512 Favorable

Question - 2 .......... For time variance we take Standard rate and multiply with difference in time

= SR ( AH - SH )

= 14.50 ( 5040 - 5140) = - 1450 Favorable

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