Question

Direct Labor Variances

The following data relate to labor cost for production of 3,500 cellular telephones:

Actual:	2,370 hrs. at $15.40
Standard:	2,330 hrs. at $15.60

a. Determine the direct labor rate variance, direct labor time variance, and 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.

Rate variance	$
Time variance	$
Total direct labor cost variance	$

b. The employees may have been less-experienced or poorly trained, thereby resulting in a   labor rate than planned. The lower level of experience or training may have resulted in   efficient performance. Thus, the actual time required was   than standard.

Answer 1