Solution
Standard labor hours Allowed | 9650 | |
Standard labor cost allowed | $ 54,040.00 | |
Labor Spending Variance | $ 2,720.00 | Unfavourable-U |
Labor rate Variance | $ 1,032.00 | Favourable-F |
Labor Efficiency variance | $ 3,752.00 | Unfavourable-U |
Variable overhead Rate Variance | $ 3,096.00 | Unfavourable-U |
Variable overhead Efficiency Variance | $ 3,015.00 | Unfavourable-U |
Working
Actual DATA for | 19300 | Units | |
Quantity (AQ) | Rate (AR) | Actual Cost | |
Direct labor | 10320 | $ 5.50 | $ 56,760.00 |
Variable Overhead | 10320 | $ 4.80 | $ 49,536.00 |
.
Standard DATA for | 19300 | Units | |
Quantity (SQ) | Rate (SR) | Standard Cost | |
[A] | [B] | [A x B] | |
Direct labor | ( 0.5 Hour x 19300 Units)=9650 Hour | $ 5.60 | $ 54,040.00 |
Variable Overhead | ( 0.5 Hour x 19300 Units)=9650 Hour | $ 4.50 | $ 43,425.00 |
.
Labor Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 5.60 | - | $ 5.50 | ) | x | 10320 |
1032 | ||||||
Variance | $ 1,032.00 | Favourable-F | ||||
Labour Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 9650 | - | 10320 | ) | x | $ 5.60 |
-3752 | ||||||
Variance | $ 3,752.00 | Unfavourable-U | ||||
Labor Spending Variance | ||||||
( | Standard Cost | - | Actual Cost | ) | ||
( | $ 54,040.00 | - | $ 56,760.00 | ) | ||
-2720 | ||||||
Variance | $ 2,720.00 | Unfavourable-U | ||||
Variable Overhead Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 4.50 | - | $ 4.80 | ) | x | 10320 |
$ (3,096.00) | ||||||
Variance | $ 3,096.00 | Unfavourable-U | ||||
Variable Overhead Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 9650 | - | 10320 | ) | x | $ 4.50 |
$ (3,015.00) | ||||||
Variance | $ 3,015.00 | Unfavourable-U |
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to...
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