Question

Cheerful Colors has budgeted two hours of direct labor per batch of​ crayons, at a standard...

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​?

Homework Answers

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
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