Question

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.

Actual quantity produced

Answer 1

Direct labour rate variance = Actual hours * (Standard rate - Actual rate)

($4,000) = 5,000 * (Standard rate - $10)

($4,000) = 5,000 * Standard rate - $50,000

Standard rate = $9.2

Total direct labour variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)

8,600 = (5,000 * $10) - (Standard hours * $9.2)

Standard hours * $9.2 = $41,400

Standard hours = 4,500

Actual quantity produced = Standard hours / Standard hours allowed per unit produced

= 4,500 / 2

= 2,250