Direct Labor Variances Dvorak Company produces a product that requires 3 standard hours per unit at a standard hourly rate of $17 per hour. If 1,000 units required 2,800 hours at an hourly rate of $16.50 per hour, what is the direct labor

(a) rate variance,

(b) time variance, and

(c) total direct labor cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Question

Business

Gunnar Reid

10 July, 12:30

Direct Labor Variances Dvorak Company produces a product that requires 3 standard hours per unit at a standard hourly rate of $17 per hour. If 1,000 units required 2,800 hours at an hourly rate of $16.50 per hour, what is the direct labor

(a) rate variance,

(b) time variance, and

(c) total direct labor cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

+1

Answers (1)

Know the Answer?

Damian Russell · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Direct Labor Variances Dvorak Company produces a product that requires 3 standard hours per unit at a standard hourly rate of $17 per hour. If 1,000 units required 2,800 hours at an hourly rate of $16.50 per hour.

A)

Direct labor price variance = (SR - AR) * AQ

Direct labor price variance = (17 - 16.5) * 2,800 = 1,400 favorable

B) Direct labor efficiency variance = (SQ - AQ) * standard rate

Direct labor efficiency variance = (3,000 - 2,800) * 17 = 3,400 favorable

C) Total direct labor variance = - 1400 - 3400 = - 4,800 favorable