Question

Ceramics Etc is a manufacturer of large flower pots for urban settings The company has these standards (Click the icon to view the standards ) Click the icon to view the actual results) Read the Requirement 1. Compute the direct laborate variance and the direct labor efficiency variance Enter the variances as positive numbers Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearest whole dollar Label the variance as favorable (F) or unfavorable (UAbbreviations used DL Direct labor) Begin with the direct laborate variance. First determine the formula for mere variance, then compute the rate variance for direct labor ) = D ate variance Actual Results Standard Price and Volume Ceramics Etc alocated food manufacturing overhead to production based on standard direct laber hours. Last month, the company reported the following actual results for the production of 1,300 Direct materials tresin).. tower pots pounds per pot at a cost of $6.00 per pound 20 hours at a cost of $12.00 per hour Direct materials Direct labor Standard variable manufacturing overhead rane Budgeted fred manufacturing overhead Standard fed MOH Direct labor S400 per direct labor hour $22.000 $10,00 per direct labor hour DUHO Purchased 12880 pounds at a cost of 56 20 per pound Used 12,430 pounds to produce 1300 pots Worked 25 hours per flower pot 3 250 total DLH) at a cost of $11.00 per hour $4.30 per direct labor hour for total actual variable manufacturing overhead of $13975 521700 Adunare manutacturing overhead Print Dono Actual e manutduring overhead Standard feed manufacturing overhead located based on actual production Print Done

Answer 1

Direct Labor rate variance = (Actual rate - Standard Rate) x Actual Hours
= ($11 - $12) x 3250 = $3250 (F)

Direct Labor efficiency Variance = (Actual hours - Standard hours) x Standard Rate
= (3250 - 2600) x $12 = $7800 (U)
Standard Hours = 1300 x 2 = 2600 hours