Question

Ellis Company’s labor information for September is as follows: Direct labor hourly rate paid $31.00 Total...

Ellis Company’s labor information for September is as follows:

Direct labor hourly rate paid $31.00
Total standard direct labor hours for units produced 10,000.00
Direct labor hours worked 9,900.00
Direct labor rate variance $7,425.00 (favorable)

Round your answers to two decimal places.

A. Compute the standard direct labor rate per hour.

$fill in the blank 1 standard rate

B. Compute the direct labor time variance.

Direct labor time variance $fill in the blank 2  

C. Compute the standard direct labor rate if the direct labor rate variance was $1,980.00 (unfavorable).

$fill in the blank 4 standard labor rate

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Homework Answers

Answer #1

Requirement A:

Standard direct labor rate $       31.75

Working:

Direct labor rate variance = (SR-AR)*AH
(SR-31)*9900 = 7425 (F)
SR = 31.75

Requirement B:

Direct labor time variance $       3,175

Working:

Direct labor time variance = (SH - AH)*SR
Direct labor time variance = (10000-9900)*31.75
Direct labor time variance = $ 3,175

Requirement C:

Standard direct labor rate $       31.45

Working:

Direct labor rate variance = (SR-AR)*AH
(SR-31)*9900 = 2950 (U)
SR = 31.45
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