Exercise 23-10
During March 2017, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.
Actual |
Standard |
||||||||||
Job Number |
Hours |
Costs |
Hours |
Costs |
Total Variance |
||||||
A257 | 210 | $4,410 | 216 | $4,536 | $126 | F | |||||
A258 | 430 | 10,320 | 410 | 8,610 | 1,710 | U | |||||
A259 | 300 | 6,660 | 298 | 6,258 | 402 | U | |||||
A260 | 120 | 2,280 | 115 | 2,415 | 135 | F | |||||
Total variance | $1,851 | U |
Analysis reveals that Job A257 was a repeat job. Job A258 was a
rush order that required overtime work at premium rates of pay. Job
A259 required a more experienced replacement worker on one shift.
Work on Job A260 was done for one day by a new trainee when a
regular worker was absent.
Prepare a report for the plant supervisor on direct labor cost
variances for March. (Round quantity variance, actual
rate, standard rate and price variance to 2 decimal places, e.g.
10.50.)
TOBY TOOL & DIE COMPANY Direct Labor Variance Report March 31, 2017For the Year Ended March 31, 2017For the Month Ended March 31, 2017 |
||||||||||||||||
Job |
Actual |
Standard |
Quantity |
Actual |
Standard |
Price |
||||||||||
A257 | $ |
FavorableUnfavorableNeither favorable nor unfavorable |
$ | $ | $ |
FavorableNeither favorable nor unfavorableUnfavorable |
||||||||||
A258 |
UnfavorableFavorableNeither favorable nor unfavorable |
$ | $ |
Neither favorable nor unfavorableUnfavorableFavorable |
||||||||||||
A259 |
UnfavorableFavorableNeither favorable nor unfavorable |
$ | $ |
UnfavorableFavorableNeither favorable nor unfavorable |
||||||||||||
A260 |
UnfavorableFavorableNeither favorable nor unfavorable |
$ | $ |
UnfavorableNeither favorable nor unfavorableFavorable |
||||||||||||
Totals | $ |
UnfavorableFavorableNeither favorable nor unfavorable |
$ |
UnfavorableNeither favorable nor unfavorableFavorable |
Answer
TOBY TOOL & DIE COMPANY | ||||||||
Direct Labor Variance Report | ||||||||
For the Month Ended March 31, 2017 | ||||||||
Job No. |
Actual Hours |
Standard Hours |
Quantity Variance |
Actual Rate |
Standard Rate |
Price Variance |
||
A257 | 210 | 216 | $ 126.00 | Favorable | $ 21.00 | $ 21.00 | $ 0.00 | Neither favorable nor unfavorable |
A258 | 430 | 410 | $ 420.00 | Unfavorable | $ 24.00 | $ 21.00 | $ 1,290.00 | Unfavorable |
A259 | 300 | 298 | $ 42.00 | Unfavorable | $ 22.20 | $ 21.00 | $ 360.00 | Unfavorable |
A260 | 120 | 115 | $ 105.00 | Unfavorable | $ 19.00 | $ 21.00 | $ 240.00 | Favorable |
Totals | $ 441.00 | Unfavorable | $ 1,410.00 | Unfavorable |
Calculation
Job Number | Actual Costs | Divided by: Hours | Actual rate |
A257 | $ 4,410 | 210 | $ 21.00 |
A258 | $ 10,320 | 430 | $ 24.00 |
A259 | $ 6,660 | 300 | $ 22.20 |
A260 | $ 2,280 | 120 | $ 19.00 |
Job Number | Standard Costs | Divided by: Hours | Standard rate |
A257 | $ 4,536 | 216 | $ 21.00 |
A258 | $ 8,610 | 410 | $ 21.00 |
A259 | $ 6,258 | 298 | $ 21.00 |
A260 | $ 2,415 | 115 | $ 21.00 |
Job Number: A257 | ||
Minus sign indicate Favorable variance. | ||
Measure | Hour | |
Standard rate per Hour | $ 21.00 | |
Actual rate per Hour | $ 21.00 | |
Standard labor Hours | 216 | |
Actual labor Hours | 210 | |
Actual rate per Hour | 21.00 | |
Less | Standard rate per Hour | -21.00 |
Difference | 0.00 | |
Multiply | Actual labor Hours | 210 |
Labor price variance | $ 0.00 | |
Indicate | No Variance | |
Actual labor Hours | 210 | |
Less | Standard labor Hours | -216 |
Difference | -6 | |
Multiply | Standard rate per Hour | 21.00 |
Labor quantity variance | $ (126.00) | |
Indicate | Favorable | |
Total Labor cost variance (Total of both variance) | $ (126) | |
Indicate | Favorable |
Job Number: A258 | ||
Minus sign indicate Favorable variance. | ||
Measure | Hour | |
Standard rate per Hour | $ 21.00 | |
Actual rate per Hour | $ 24.00 | |
Standard labor Hours | 410 | |
Actual labor Hours | 430 | |
Actual rate per Hour | 24.00 | |
Less | Standard rate per Hour | -21.00 |
Difference | 3.00 | |
Multiply | Actual labor Hours | 430 |
Labor price variance | $ 1,290.00 | |
Indicate | Unfavorable | |
Actual labor Hours | 430 | |
Less | Standard labor Hours | -410 |
Difference | 20 | |
Multiply | Standard rate per Hour | 21.00 |
Labor quantity variance | $ 420.00 | |
Indicate | Unfavorable | |
Total Labor cost variance (Total of both variance) | $ 1,710 | |
Indicate | Unfavorable |
Job Number: A259 | ||
Minus sign indicate Favorable variance. | ||
Measure | Hour | |
Standard rate per Hour | $ 21.00 | |
Actual rate per Hour | $ 22.20 | |
Standard labor Hours | 298 | |
Actual labor Hours | 300 | |
Actual rate per Hour | 22.20 | |
Less | Standard rate per Hour | -21.00 |
Difference | 1.20 | |
Multiply | Actual labor Hours | 300 |
Labor price variance | $ 360.00 | |
Indicate | Unfavorable | |
Actual labor Hours | 300 | |
Less | Standard labor Hours | -298 |
Difference | 2 | |
Multiply | Standard rate per Hour | 21.00 |
Labor quantity variance | $ 42.00 | |
Indicate | Unfavorable | |
Total Labor cost variance (Total of both variance) | $ 402 | |
Indicate | Unfavorable |
Job Number: A260 | ||
Minus sign indicate Favorable variance. | ||
Measure | Hour | |
Standard rate per Hour | $ 21.00 | |
Actual rate per Hour | $ 19.00 | |
Standard labor Hours | 115 | |
Actual labor Hours | 120 | |
Actual rate per Hour | 19.00 | |
Less | Standard rate per Hour | -21.00 |
Difference | -2.00 | |
Multiply | Actual labor Hours | 120 |
Labor price variance | $ (240.00) | |
Indicate | Favorable | |
Actual labor Hours | 120 | |
Less | Standard labor Hours | -115 |
Difference | 5 | |
Multiply | Standard rate per Hour | 21.00 |
Labor quantity variance | $ 105.00 | |
Indicate | Unfavorable | |
Total Labor cost variance (Total of both variance) | $ (135) | |
Indicate | Favorable |
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