Secaur Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor)...

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Secaur Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor) time spent on each retu 1. What is the actual (direct labor) wage rate per hour paid last month? 2. What is the direct labor rate variance? 3. What i

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Answer 1

Answer #1

1. Actual wage rate per hour = Actual total wages paid divided by actual hours spent

= 61075/3490

= $ 17.5 per hour

2. Direct Labor rate Variance = (Standard Rate less Actual Rate) multiplied by Actual hours

= (16-17.5)*3490

= ($5,235) Unfavorable variance

3. Direct Labor Efficiency Variance = (Standard hours less Actual hours) multiplied by Standard Rate

=((700*5)-3490)*16

=$160 Favorable Variance

4. Direct labor rate variance is unfavorable by $ 5235, whereas Direct labor efficiency variance is favorable by $ 160 only. This denotes labor hours are utilized efficiently as planned/expected, whereas rate per hour is paid extra as compared to the standard rate applicable.

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Answer 2

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