Question

Lamp Company produces lamps that require 2 standard hours per unit at a standard hourly rate of $20.60 per hour. Production of 6,700 units required 13,130 hours at an hourly rate of $20.00 per hour.

What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance? Enter favorable variances as negative numbers.

a. Direct labor rate variance |
$ | |

b. Direct labor time variance |
$ | |

c. Total direct labor cost variance |

Determine also if favorable or not favorable

Answer #1

**1. Direct labor rate variance:**

Direct Labor rate variance = (Standard Rate - Actual Rate) x Actual hrs

= (20.6 - 20) x 13,130

**= - $ 7878 Favorable**

**2.** **Labor efficiency
variance:**

Direct Labor efficiency variance = (Standard hrs - Actual Hrs) x Standard Rate

= (2 x 6700 - 13130) x 20.6

**= - $5562 Favorable**

**3.** **Direct Labor cost
variance**

Direct Labor cost variance = (Standard hrs x Standard Rate - Actual hrs x Actual Rate)

= (13400 x 20.6 – 13130 x 20)

**= - $13440 Favorable**

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unit at a standard hourly rate of $20.00 per hour. Production of
5,700 units required 16,590 hours at an hourly rate of $20.60 per
hour.
What is the direct labor (a) rate variance, (b) time variance,
and (c) total cost variance? Enter favorable variances as negative
numbers.
a. Direct labor rate variance
$
b. Direct labor time variance
$
c. Total direct labor cost variance
$

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What is the direct labor (a) rate variance, (b) time variance,
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a. Direct labor rate variance
$
b. Direct labor time variance
$
c. Total direct labor cost variance
$

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(b) time variance, and
(c) total cost variance?
Enter favorable variances as negative numbers.
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b. Direct labor time variance $
c. Total direct labor cost variance $

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