Question

eBook Show Me How Calculator E Print Item Direct Labor Variances The following data relate to labor cost for production of 4,200 cellular telephones: Actual: Standard: 2,820 hrs. at $16 2,780 hrs. at $16.3 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 variance $ -846 Favorable Time variance Unfavorable Total direct labor cost variance Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard. Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit) The labor cost variance is the difference between the actual and standard labor cost. nedfarters affectina labor performance

Can some please help?

Answer 1

Part A

Rate variance	-846	Favorable
Time variance	652	Unfavorable
Total direct labor cost variance	-194	Favorable

Labor rate variance = AH*(AR-SR) = 2820*(16-16.30) = $-846

Labor time variance = SR*(AH-SH) = 16.30*(2820-2780) = $652

Labor cost variance = -846+652 = -194

Part 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 more efficient performance. Thus, the actual time required was less than standard.