Please do this as soon as possible>>> Vernon\'s Doll Company produces handmade d
ID: 2518696 • Letter: P
Question
Please do this as soon as possible>>>
Vernon's Doll Company produces handmade dolls. The standard amount of time spent on each doll Is 1.50 hours. The standard cost of labor Is $7.70 per hour. The company planned to make 8,300 dolls during the year but actually used 12850 hours of labor to make 9,000 dolls. The payroll amounted to $103,571. Required a. Should labor varlances be based on the planned volume of 8,300 dolls or the actual volume of 9,000 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price varlance and Indicate whether It Is favorable (F) or unfavorable (U) d. Compute the labor usage varlance and Indicate whether It Is favorable (F) or unfavorable (U). Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. (Round Standard price" and "Actual price to 2 decimal places.) Table Standard labor price Actual price Standard hours for flexible budget Actual hours used per hour per hour Req A Req C andD >Explanation / Answer
a.
The labour variance should be based on the actual volume of 9,000 dolls.
b.
c.
Total labour price variance = (Standard price - Actual price) * Actual labour hours
= (7.7 - 8.06) * 12,850
= 4,626 Unfavourable
d.
Total labour usage variance = (Actual labour hours - Standard labour hours) * Strandard price
= (12,850 - 13,500) * 7.7
= 5,005 Favourable
Labour Variance Information Table Standard labour price 7.70 per hour Actual price 8.06 (103,571/12,850) per hour Standard hours for flexible budget 13,500 (9,000*1.5) Actual hours used 12,850