Actual quantity of direct labor 5,000 hours
Actual direct labor rate $10 per hour
Total direct labor variance $8,600 Unfavorable .
Direct labor rate variance $4,000 Unfavorable .
Standard hours allowed per unit produced 2 hours
Required: Find the following unknowns.
a. Direct labor efficiency variance
b. Standard rate per direct labor hour
c. Actual quantity produced
a)Direct labour efficiency variance = Total labour variance-Direct labour rate variance = 8600-4000 = 4600 Unfavorable
b) Direct labour rate variance = (Standard rate-actual rate) actual hours
-4000 = (5000X-50000)
-5000X = -46000
X(standard rate per hour) = 46000/5000 = $9.20 per hour
c) Direct labour efficiency variance = (Standard hour-actual hour)Standard rate
-4600 = (X*2*9.2-10000*9.2)
-4600 = 18.4X-92000
-18.4X = -87400
X(Actual quantity produced) = 87400/18.4 = 4750 Units
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