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Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some

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Answer #1

a. Actual labour Rate is:

(AR-SR)* Actual hours = Labour rate variance
Actual rate= (-3,150/2,250)+14.4
13.0 per hour
Labour rate variance is -3,150
Standard rate is 14.4 per hour
Actual hours is 2,250

b. Direct labour efficiency variance for August is Total direct labour budget variance minus direct labour rate variance

Direct labour efficiency variance = 1,170- (-3,150) = 4,320 Unfavourable.

c. Standard direct direct labour hours allowed for actual level of outputs is:

Direct Labour efficiency variance (AH-SH)*SR
4,320= (2,250-SH)*14.4
(2,250-Standard hours) = 4,320/14.4
Standard hours 2,250-300
1,950
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