Question

# Japan Company produces lamps that require 3 standard hours per unit at a standard hourly rate...

Japan Company produces lamps that require 3 standard hours per 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 \$

 Answer: Particulars Formula and Calculation a. Direct labor rate variance: = (Actual Rate - Standard Rate) * Actual Hours = (20.60 - 20) * 16590 = \$ 9954 (U) b. Direct labor time variance: = (Standard Hours - Actual Hours) * Standard rate = ((5700 *3) - 16590) * 20 = \$ - 10200 (F) c. Total direct labor cost variance: = (Actual Hours * Actual Rate) - (Standard hours * Standard Rate) = (16590 * 20.60) - (17100 * 20) = \$ - 246 (F)

Favorable variances entered as negative numbers.

#### Earn Coins

Coins can be redeemed for fabulous gifts.