Question

23-2 1) Direct Labor Variances Bellingham Company produces a product that requires 8 standard hours per...

23-2

1) Direct Labor Variances

Bellingham Company produces a product that requires 8 standard hours per unit at a standard hourly rate of $11.00 per hour. If 4,800 units required 39,600 hours at an hourly rate of $10.67 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) 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.

a. Direct labor rate variance $
b. Direct labor time variance $
c. Total direct labor cost variance $

Homework Answers

Answer #1

a. Direct labor rate variance = (Actual hours * Actual rate) - (Actual hours * Standard rate)

= (39,600 * $10.67) - (39,600 * $11)

= $13,068 Favorable

b. Direct labor time variance = (Actual hours * Standard rate) - (Standard hours * Standard rate)

= (39,600 * $11) - (4,800 * 8 * $11)

= $13,200 Unfavorable

c. Total direct labor cost varaince = Direct labor rate variance + Direct labor rate variance

= $13,068 Favorable + $13,200 Unfavorable

= $132 Unfavorable

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