Exercise 6-15 Crane Paints manufactures artist’s oil paints. Each 40 ml tube of paint requires 5...
Exercise 6-15 Crane Paints manufactures artist’s oil paints. Each 40 ml tube of paint requires 5 minutes of direct labor, and the standard labor rate is $8.12 per direct labor hour. In September, Crane incurred 10,970 direct labor hours at a cost of $86,000 to produce 146,600 tubes of paint. Calculate Crane’s direct labor rate variance for September. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Direct labor rate variance $
Homework Answers
Actual rate = Actual Cost / Actual Hours
= $ 86,000 / 10970 Hours
= $ 7.839562443
Direct Labor rate variance = (Actual Hours * Actual Rate) - (Actual Hours * Standard Rate)
= ( $ 86,000) - ( 10,970 * $ 8.12)
= 86000- 89076.40
= 3,076.40
= $ 3,076
Since the Actual rate is less than the standard rate, the variance is favorable
Hence the correct answer is $ 3,076
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Exercise 6-15 Crane Paints manufactures artist’s oil paints.
Each 40 ml tube of paint requires 5...
Crane Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The...
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