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Answered
The standards for product G78V specify 5.5 direct labor-hours per unit at $13.50 per direct labor-hour. Last month 1,740 units of product G78V were produced using 9,600 direct labor-hours at a total direct labor wage cost of $122,220.Required:a. What was the labor rate variance for the month?b. What was the labor efficiency variance for the month?
On Jun 19, 2024
a. Labor rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)= ${{[a(5)]:#,###}} − ({{[a(4)]:#,###}} hours × ${{[a(2)]:#,###.00}} per hour)= ${{[a(5)]:#,###}} − ${{[a(6)]:#,###}}= ${{[a(7)]:#,###}} Favorableb. Standard hours = Standard hours per unit × Actual output = {{[a(1)]:#,###.0}} hours per unit × {{[a(3)]:#,###}} units = {{[a(8)]:#,###}} hoursLabor efficiency variance = (Actual hours − Standard hours) × Standard rate= ({{[a(4)]:#,###}} hours − {{[a(8)]:#,###}} hours) × ${{[a(2)]:#,###.00}} per hour= {{[a(9)]:#,###}} hours × ${{[a(2)]:#,###.00}} per hour= ${{[a(10)]:#,###}} Unfavorable