Show Me HowCaloulator Direct Labor Variances The folowing data relate to labor c
ID: 2557454 • Letter: S
Question
Show Me HowCaloulator Direct Labor Variances The folowing data relate to labor cost for production of 6,500 cellular telephones Actual Standard: 4,300 hrs. at $16.1 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Rate varlance 4,370 hrs. at $15.8 Favorable v Time variance Total direct labor cost varlance Favorable v b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard avorabe arances cn be thought of as increasing oosts (a debe Favorable vaiances can be thought of as dlecreasing coss (a cred The labor cost varance is the difeence between the scual and standard abor co 8 0Explanation / Answer
a) Variance :
Rate variance = (16.1-15.8)*4370 = 1311 Favorable
Time variance = (4300-4370)*16.1 = 1127 Unfavorable
Cost variance = (4300*16.1)-(4370*15.8) = 184 Favorable
b) The employee may have been less experienced or poorly trained there by resulting in a lower labour rate then planned. the lower level of experience or training may have resulted in less efficiency performance. Thus the actual time required was more than standard