Question

The Reedy Company uses a standard costing system.  The following data are available for November:

Actual direct labor-hours worked …………………….              5,800  hours

Standard direct labor rate ………………………………..                   $9  per hour

Labor rate variance …………………………………………..                        $1,160 favorable

            Calculate the actual direct labor rate for November.

Answer 1

Given Data,

AH = 5,800

SR = $ 9 per hour

Labor rate variance $ 1,160 favorable

Calculation of  actual direct labor rate for November is as follows;

Labor rate variance = ( SR - AR) * AH

Let the AR be x

$ 1,160 = ( $ 9 - x ) * 5,800

$ 1,160 = $ 52,200 - 5,800x

5,800x = $ 52,200 -$ 1,160

5,800x = $ 51,040

x = $ 51,040 / 5,800

x = $ 8.8

Thus, AR $ 8.8

Actual Rate per labor hour is $ 8.8

Where,

AH = Actual labor hours

SR = Standard Rate per labor hour

AR = Actual Rate per labor hour

answered by: anonymous