Question

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:

Direct material of 5.50 yards at $5.00 per yard

Direct labor of 2.50 hours at $20.00 per hour

Overhead applied per sleeping bag at $18

In the month of April, the company actually produced 5,100 sleeping bags using 26,800 yards of material at a cost of $5.10 per yard. The labor used was 13,250 hours at an average rate of $17.50 per hour. The actual overhead spending was $96,200.

Determine the labor quantity variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Answer 1

Answer:

Determination of the labor quantity variance:

Standard direct labor hours required for 5,100 sleeping bags = 5,100 x 2.50 hours = 12,750 hours

Actual direct labor hpurs used to produced 5,100 sleeping bags = 13,250 hours

Standard direct labor rate = $20.00 per hour

Now,

Direct labor quantity variance = (Standard hours - Actual hours) x Standard rate per hour

= (12,750 hours - 13,250 hours) x $20.00 per hour

= 10,000 Unfavorable

Direct labor quantity variance

$10,000