Information regarding Maxwell\'s direct labor ost for the month of January follo

Question

Information regarding Maxwell's direct labor ost for the month of January follows: Direct labor hourly rate paid Total standard direct labor-hours for units produced this period Direct labor-hours worked Direct labor rate variance $30.00 12,500 12,300 $17,500 favorable Required: 1. Compute the standard direct labor wage rate per hour in January. (Round your final answer to two decimal places.) Standard direct labor rate per hour 2. Compute the direct labor efficiency variance. (Round your standard direct labor rate per hour to two decimal places and your final answer to the nearest whole dollar amount.) Direct labor efficiency variance

Explanation / Answer

Answer

standard direct labor rate per hour =

labor rate variance =( actual rate - standard rate ) * actual hours

17500 = ( 30 - standard rate ) * 12300

17500 / 12300 = 30 - standard rate

1.4227 = 30 - standard rate

standard rate = 30 + 1.4227

= 31.4227

labour efficiency variance = ( actual hour - standard hours ) * standard rate

= ( 12300 - 12500 ) * 31.4227

= 6284.54 favorable

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