Question

Labor Rate and Efficiency Variances Tico Inc. produces plastic bottles. Each bottle has a standard labor...

Labor Rate and Efficiency Variances Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.025 hour. During the month of April, 1,000,000 bottles were produced using 23,600 labor hours @ $18.00. The standard wage rate is $16.00 per hour. Required: Calculate the labor rate and efficiency variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable. Labor rate variance $ Labor efficiency variance $

Homework Answers

Answer #1
Standard Actual
Particulars Hours Rate amount Hours Rate amount
Labour          25,000.00             16.0000       400,000.00          23,600.00                  18.00       424,800.00
Actual output    1,000,000.00
Labour hrs reqd (1000,000*.025)          25,000.00
DLRV= (SR-AR)AH
DLRV= (16 - 18)23,600
DLRV= 47,200 U
DLEV = (SH-AH)SR
DLEV = (25,000 - 23,600)16
DLEV = (1,400)16
DLEV = 22,400 F
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