Question
Company L manufactures guitars. At the beginning of 2019, they budgeted for the following -5 direct...
Company L manufactures guitars. At the beginning of 2019, they budgeted for the following
-5 direct labor hours per guitar
-$24 per direct labor hour
-3,000 guitars produced and sold
Company L invested in new guitar machines in 2019 that allowed much of the labor to be done by less experienced workers. This resulted in a favorable rate variance of $63,000. Assume company L was accurate in their production and sales goals and that the guitar machine also allowed company L to use only 4 hours of direct labor for guitar.
What was the actual labor rate per direct labor hour on average, for 2019?
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