Answer | ||||||
Actual Hours | 2530 | |||||
Actual Rate | $ 13.9 | |||||
Standard Hours | 2490 | |||||
Standard Rate | $ 14.2 | |||||
a) | Direct Labor rate variance = Actual hours ( Actual Rate - Standard rate ) | |||||
2530 ( $13.9 - $14.2 ) | ||||||
$ 759 Favorable | ||||||
Direct Labor time variance = Standard rate ( Actual Hours - Standard Hours ) | ||||||
$14.2 ( 2530 - 2490 ) | ||||||
$ 568 Unfavorable | ||||||
Total direct labor cost variance = (Standard Rate * Standard Hours) - ( Actual Rate * Actual Hours ) | ||||||
($ 14.2* 2490) - ($13.9* 2530) | ||||||
$ 191 Favorable | ||||||
b) | The employees may have been less-experienced or poorly trained, thereby resulting in a | |||||
higher labor rate than planned. The lower level of experience or training may have resulted | ||||||
in more efficient performance. Thus, the actual time required was less than standard. | ||||||
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