Direct Labor Variances The following data relate to labor cost for production of 5,600 cellular...
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Accounting
Direct Labor Variances
The following data relate to labor cost for production of 5,600 cellular telephones:
Actual:
3,790 hrs. at $12.70
Standard:
3,730 hrs. at $13.00
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
$fill in the blank 1
FavorableUnfavorableFavorable
Time variance
$fill in the blank 3
FavorableUnfavorableUnfavorable
Total direct labor cost variance
$fill in the blank 5
FavorableUnfavorableFavorable
b. The employees may have been less-experienced or poorly trained, thereby resulting in a
higherlowerlower
labor rate than planned. The lower level of experience or training may have resulted in
morelessless
efficient performance. Thus, the actual time required was
morelessmore
than standard.
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