Question

Information regarding Maxwell's direct labor cost for the month of January follows: Direct labor hourly rate paid Total standard direct labor hours $ 30.50 for units produced this period Direct labor hours actually worked Direct labor rate variance 13,000 12,800 $18,000 favorable Required: 1. Compute the standard direct labor wage rate per hour in January. (Round your answer to 2 decimal places.) 2. Compute the direct labor efficiency variance for January. Was this variance favorable (F) or unfavorable (U)? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) 1 Standard direct labor rate per hour 2. Direct labor efficiency variance

Answer 1

1. Direct Labor Rate Variance = ( Standard Rate - Actual rate ) * Actual hours.

>> $ 18,000 = ( Standard Rate - $ 30.5 ) * 12,800.

>> Standard Rate = $ 31.91.

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2. Direct Labor Efficiency Variance = ( Standard Hours - Actual Hours ) * Standard Rate.

>> Direct Labor Efficiency Variance = ( 13,000 - 12,800 ) * $ 31.91.

>> Direct Labor Efficiency Variance = $ 6,382.

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