Question

Question 25 Nifty Nail Salon Limited is trying to determine the standard labour cost of a manicure. The following data has been collected after analyzing one month's work: actual time spent on a manicure 1 hour; hourly wage rate $11; payroll taxes 5% of wage rate; set-up and downtime 5% of actual labour time; cleanup and rest periods 12% of actual labour time. Determine the standard direct labour hours per manicure. (Round answer to 2 decimal places, e.g. 15.25.) Standard direct labour hours per manicure 1.17 hours LINK TO TEXT Determine the direct labour cost per direct labour hour. (Round answer to 2 decimal places, e.g. 15.25.) Direct labour cost per direct labour hour 11.55 LINK TO TEXT If a manicure took 1 hour at the standard hourly rate, what is the direct labour quantity variance on that one manicure? (Round answer to 2 decimal places, e.g. 15.25.) Quantity variances -1.9635 Favourable LINK TO TEXT If one employee has an hourly wage rate of $11.50 and she worked 30 hours on completing manicures for the week, what is the direct labour price variance? (Round answer to 2 decimal places, e.g. 15.25.) Neither favourable nor unfavourable Price variance & 15.7 Unfavourable Favourable

Answer 1

Answer
1)
Actual time required	1
set up and downtime [1*.05]	0.05
clean up and rest period [1*.12]	0.12
standard direct labor hours per manicure	1.17
2)
Direct labor cost per DLH =11[1+.05]= $ 11.55 per DL
3)quantity variance = SR[AH -SH]
= 11.55 [1-1.17]
= 11.55 * - .17
= - 1.96 F
4)PRICE Variance= AH[AR-SR]
= 30[12.075-11.55]
= 15.75 U
**hourly wage rate including payroll tax = 11.50[1+.05] = 12.075