Europa Company manufactures only one product. Presented below is direct labor information for November.
Standard direct labor hours per unit of product | 3.30 | |||
Number of finished units produced | 6,100 | |||
Standard wage rate per direct labor hour (SP) | $ | 19.30 | ||
Total direct labor payroll for the period | $ | 362,250 | ||
Actual wage rate per direct labor hour worked (AP) | $ | 16.10 | ||
The direct labor rate variance for November (to the nearest dollar) was:
Answer:
Direct labor rate variance = Actual direct labor hours [AR-SR]
= 22500 [16.10 - 19.30]
= 22500 *- 3.2
= - 72000 Favorable (enter as 72000 F as positive value)
Working:
Actual Hours worked = Actual labor cost /Actual wage rate per direct labor hour worked
= 362250 / 16.10
= 22500 DLH
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