Question

Direct Labor Variances

La Batre Bicycle Company manufactures commuter bicycles from recycled materials. The following data for July of the current year are available:

Quantity of direct labor used	470 hrs.
Actual rate for direct labor	$12.6 per hr.
Bicycles completed in April	220 bicycles
Standard direct labor per bicycle	2 hrs.
Standard rate for direct labor	$12.9 per hr.

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.

Direct Labor Rate Variance	$	Favorable
Direct Labor Time Variance	$	Favorable
Total Direct Labor Cost Variance	$	Favorable

b. How much direct labor should be debited to Work in Process?
$

Answer 1

La Bote Rog ( Di de labor Rale VO 1ance Direct labor time variance Totoy bec loboy Cost variance & 141 $ 387 5 346 (El (0) (0) 1 Rare variance = S Actic Rate nce = [ ACHICH Rate Per hour - - Standard Rate ] Pes hous Actucy HOUX = [& 12.6 - $ 12.9] x 470 Hour $ 141 favorable 2 Time variance : Actual - Hour standard x standaae rate Hour pes Hour - [ 470 - ( 220 X 2 HOUR] x $ 12.9 L 470 - 4407X $ 12.9. $ 387 unfavosable torcy cost variance = + 387 (0) $ 141 CF $246 (0) $5676 ? How much DL should be debited to WIP standard coste standard Houx X Standard rote 440 HOU XS 12.9 - F 5676