Asked by Jaydan MacMaster on May 27, 2024
Verified
Compute the direct labor rate and time variances for Taylor Company.
Direct Labor Rate Variance
The difference between the expected cost of direct labor and the actual cost incurred, based on the rate paid per hour.
Direct Labor Time Variance
The difference between the actual time spent on production and the estimated standard time, multiplied by the standard labor rate.
- Absorb the techniques for computing variances in direct labor rates and time.
Verified Answer
GS
Grace StephensonMay 29, 2024
Final Answer :
Direct labor rate variance: $62,928 - ($14.00 × 4,560) = $(912) favorable
Direct labor time variance: [4,560 - (980 × 4.5)] × $14.00 = $2,100 unfavorable
Direct labor time variance: [4,560 - (980 × 4.5)] × $14.00 = $2,100 unfavorable
Learning Objectives
- Absorb the techniques for computing variances in direct labor rates and time.