Direct labour variances and overhead spending variance
The following data for Kitchen Tile Company relates to the production of 18 000 tiles during the past month. The entity allocates fixed overhead costs at a standard rate of $19 per direct labour hour.
Standard cost is 6 tiles per hour at $24 per hour
Actual cost per hour was $24.50
Labour efficiency variance was $6720 F
Fixed overhead costs:
Estimated = $60,000
Actual = $58,720
(a) How many actual labour hours were worked to produce the 18 000 tiles?
(b) What is the price variance for direct labour?
(c) What is the budget variance for fixed costs?
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