Question

QUESTION 1 2 points New Tone, Inc makes MP3 players and uses standard costing. They recently used 20,000 labor hours to produce 8,000 units. They originally budgeted 21,000 hours to produce 9,000 units with payroll of $333,000. The company's actual payrol cost amounted to $305,000. What was the direct labor rate variance? Please round to the nearest dollar at the end of your calculations. Also, type "u' for unfavorable or "F for favorable to indicate the direction of the variance.

Answer 1

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New Tone
Budgeted Labor Hour rate
Budgeted Payroll	333,000.00			A
Budgeted Hours	21,000.00			B
Budgeted Labor Hour rate	15.86			C=A/B
Direct Labor Variance	Hours	Rate per unit	Amount
Actual Hours of Input, at Standard Rate	20,000.00	15.86	317,142.86	D
Actual labor cost			305,000.00	E
Rate Variance (E-D)			(12,142.86)	Favorable
Garland Company
Price Variance (C-B 2)	Pounds	Rate per unit	Amount
Actual Quantity of materials purchased at Standard Price	4,300.00	0.72	3,096.00	F
Actual cost of materials	4,300.00	0.75	3,225.00	G
Price Variance (G-F)			129.00	Unfavorable
A firm
Labor hours used	6,000.00	H
Labor hour rate	20.00	I
Dollar value of credit to wages payable	120,000.00	J=H*I