Question

**Please use numbers given** Please answer the blank boxes in (a) - thank you in advance!! :)

Direct Labor Variances The following data relate to labor cost for production of 5,200 cellular telephones: Actual: Standard: 3,530 hrs. at $12.6 3,470 hrs. at $12.9 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Favorable Time variance Unfavorable Total direct labor cost variance Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard.

Answer 1

Data SR SH Standard Rate Standard Hours for Actual output Actual hours Worked Actual Rate 12.90 Per hour 3470 Hours 3530 hours 12.60 Per hour AH AR Answers -1059 Favorable Rate Varaince (AR-SR)*AH=(12.60-12.90*3530 Time Varaince (AH-SH)*SR=(3530-3470) *12.90 Total labor cost Varaince (SH*SR)-(AH-AR) 774 Unfavorable -285 Favorable B The Employees may have been less-Experienced or poorly trained, there by Resuling in a Lower Labor rate than planned. The lower level of Experence or training may resulted in Less Efficiencent Performance, Ths, the actual time required was More than Standard