Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

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Business

Cassius Mendoza

9 July, 06:52

Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

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Monserrat Keller · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

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

Direct labor efficiency variance = (3,300hs - 2,970hs) * 11 = $3,630 favorable

Direct labor rate variance = (Standard Rate - Actual Rate) * Actual Quantity

Direct labor rate variance = (11 - 12.1) * 2,970 = $3,267 unfavorable