Mini-Exercise 15-4 (Algo) Direct labor variances LO 15-4, 15-5 Acme Company's production budget for August is 19,400 units and includes the following component unit costs: direct materials, $10.00; direct labor, $12.50; variable overhead, $6.00. Budgeted fixed overhead is $51,000. Actual production in August was 20,928 units. Actual unit component costs incurred during August include direct materials, $10.50; direct labor, $12.00; variable overhead, $6.50. Actual fixed overhead was $54,400. The standard direct labor cost per unit consists of 0.5 hour of labor time at $25 per hour. During August, $251,136 of actual labor cost was incurred for 9,810 direct labor hours. Required: Calculate the labor rate variance and labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Labor rate variance Labor efficiency variance
Mini-Exercise 15-4 (Algo) Direct labor variances LO 15-4, 15-5 Acme Company's production budget for August is 19,400 units and includes the following component unit costs: direct materials, $10.00; direct labor, $12.50; variable overhead, $6.00. Budgeted fixed overhead is $51,000. Actual production in August was 20,928 units. Actual unit component costs incurred during August include direct materials, $10.50; direct labor, $12.00; variable overhead, $6.50. Actual fixed overhead was $54,400. The standard direct labor cost per unit consists of 0.5 hour of labor time at $25 per hour. During August, $251,136 of actual labor cost was incurred for 9,810 direct labor hours. Required: Calculate the labor rate variance and labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Labor rate variance Labor efficiency variance
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 12E: Direct materials and direct labor variances At the beginning of June, Bezco Toy Company budgeted...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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