Ceramics Etc.is manufacturer of larg lowar pors for urban settirgs. The compeny
ID: 2570686 • Letter: C
Question
Ceramics Etc.is manufacturer of larg lowar pors for urban settirgs. The compeny has thse andard Read uimrt 1. Computa the drect iaberrats varlance and the direct sbor chcicncy varian. Entrtha varancesas pesittie numbers Lerth currency amcunts In tha fomulas to the ncarcst cent, then round the tinal variance amourts toh n lar. Labal the varane(F)or untavorabla (u Abibrevistiuns used DL-Direct lsbor Bagin whh tha drect labr raa warlance Hit dahenmina the tamula tor the rata arance, than compute tha rata varlanca tor dract labor DLrate variance Now compute the direct labor fficiency varisance. First deermine the formula forthe efficiency varince, then compute the eficiency variance for direct abor. The lulsl verianue for cined labor i Requirement 4 Interpret the variances | labor rato variance moons that watmmane's c mplavces comed | | per hour than budgcted The | labor eficiency variance means that it sctuslly took | direct labor hours 1hsn itshould have to produce 1 .100 patsExplanation / Answer
Labor rate variance =Actual hours*[Actual rate-standard rate]
= 3520[16-17]
= 3520 *-1
= -3520 F
Labor efficiency variance =Standard rate [Actual hours -standard hours]
= 17[3520-3300]
= 17 *220
= 3740 U
***Standard hours 1100*3=3300
Total variance = -3520+3740
= 220 U
3)production supervisor is responsible for rate variance
PRODUCTION DEPArtment is responsible for efficiency variance
4)Favorable rate variance means employed earned $ 1 less than budgeted
unfavorable efficiency variance means it Actuall took more hours than budgeted