Question

The following information applies to the questions displayed below. A manufactured product has the following information for June Standard Actual Direct materials Direct labor Overhead Units manufactured (7 lbs. $7 per lb.) (3 hrs. $16 per hr 21,000 hrs. e $16.50 per hr. (3 hrs.e $11 per hr $240,700 50,300 1bs. $7.10 per lb. 7,100 AH Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable

Answer 1

Actual DATA for		7100	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct labor	21000	$ 16.50	$    346,500.00

Standard DATA for		7100	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct labor	( 3 Hours x 7100 Units)=21300 Hours	$      16.00	$   340,800.00

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$ 16.00	-	$   16.50	)	x	21000
	-10500
	Variance		$ 10,500.00			Unfavorable-U

Labor Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	21300	-	21000	)	x	$    16.00
	4800
	Variance		$ 4,800.00			Favorable-F