Asked by Diego Dulanto on May 10, 2024
Verified
Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows: Determine the direct labor (a) time variance, (b) rate variance, and (c) total cost variance.
Direct Labor Time Variance
The difference between the estimated time to complete a task and the actual time taken, affecting cost management in manufacturing.
Direct Labor Rate Variance
The difference between the actual cost of direct labor and the expected (or standard) cost, calculated for a specific period.
Total Cost Variance
This refers to the difference between the budgeted or standard cost of production and the actual cost incurred.
- Comprehend the methodology for computing the variance in direct labor time.
- Comprehend the method for computing variance in direct labor rate.
- Comprehend the methodology for determining the variance in total direct labor costs.
Verified Answer
Learning Objectives
- Comprehend the methodology for computing the variance in direct labor time.
- Comprehend the method for computing variance in direct labor rate.
- Comprehend the methodology for determining the variance in total direct labor costs.
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