Question

Juliet Pants standard cost per pants included 0.20 direct labour hours per pants at $16.00 per hour. Juliet Pants actually used 10,350 direct labour hours at a cost of $15.80 per hour to produce 50,000 pants.

a) Calculate the direct labour rate variance: $

b) Is the direct labour rate variance favourable or unfavourable?

c) Calculate the direct labour efficiency variance: $

d) Is the direct labour efficiency variance favourable or unfavourable?

e) Calculate the total direct labour variance: $

f) Is the total direct labour variance favourable or unfavourable?

Answer 1

	A)	Direct labor rate variance
		(Actual Rate - standard rate)*actual direct labor hrs
		(15.80 - 16)*10,350
		2070	F
	b)	Favourable
	c)	Direct labor Efficiency Variance
		(Actual hours - standard hours)*Standard rate
		(10,350   - 50,000*.20)*16
		5600	U
	d)	unfavourable
	e)	Total direct labor variance
		(actual cost - standard cost)
		15.8*10350   - 50,000*.2*16
		3530	U
	f)	unfavourable