|
Standard direct labour hours per unit
|
0.50
|
|
Number of actual production units
|
105,000.00
|
|
|
|
Standard labour hours (105000 x 0.5)
|
52,500.00
|
|
|
|
Standard direct labour hour rate per hour
|
8.05
|
|
|
|
Standard direct labour cost should have been (52500 x 8.05)
|
$422,625.00
|
|
|
|
|
|
Actual direct labour hours used
|
52,400.00
|
|
Actual direct labour hour rate
|
8.10
|
|
|
|
Actual cost of labour (52400 x 8.10)
|
$424,440.00
|
|
|
|
Direct labour hour flexible budget variance (424,440 –
422,625)
|
$1,815.00 (U)
|
Thus, the actual direct labour flexible budget variance is
$1,515.00 and it is unfavourable as the cost of direct labour is
higher than the standard labour cost.
