Question

Cheerful Colors has budgeted two hours of direct labor per batch of​ crayons, at a standard cost of $13​/hour.

During October, laborers actually worked 220 hours completing 70 batches. All 70 batches actually produced were sold. Cheerful Colors paid workers

$20​/hour. What was Cheerful​ Color's direct labor efficiency variance for

October​?

Answer 1

Computation of the Labour Variance Particulars Amount 1 Per Batch number of Hrs 2 Labour Hrs 2 Direct Cost Per Labour Hr $13/hr 3 Actual Hrs Worked 220 4 Number Batches Produced in October Month 70 5 Actual Payment $20/hr Direct Labor Efficiency Variance: =Actual Hours x Standard Rate - Standard Hours x Standard Rate =Standard Cost of Actual Hours - Standard Cost =2860-1820 =$1040 Working Note : a Standard Hrs =2 hr * 70 batches 140hr b Standard cost =140hr*$13/hr 1820 c Standard cost of actual number of hours =$13/hr * 220hrs 2860