Use the following data to find the direct labor efficiency variance. Direct labor standard (4.5 hrs.@ $6/hr.) Actual hours worked per unit Actual units produced Actual rate per hour O $4,200 unfavorable O $16,800 unfavorable O $16,800 favorable O $12,600 favorable O $3,150 favorable $27per finished unit 4.0 hrs 4,200 units $6.25
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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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- A company reports the following information for its direct labor. Actual hours of direct labor used Actual rate of direct labor per hour Standard rate of direct labor per hour Standard hours of direct labor for units produced ! AH = Actual Hours SH= Standard Hours AR= Actual Rate SR Standard Rate Compute the direct labor rate and efficiency variances and identify each as favorable or unfavorable. Q F1 Actual Cost @ 2 W F2 # 3 E 80 F3 $ $ 4 0 Ơ F4 R $ % 5 0 0 * DII 8 F8 Standard Cost ( 9 F9 ) U I O F1A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output 3.00 DLH3 Standard variable overhead rate $10.75 per DLH The following data pertain to operations for the last month: Actual direct labor-hours 9,600 DLHS Actual total variable manufacturing overhead cost Actual output $95,760 2,500 units What is the variable overhead efficiency variance for the month?Direct Labor Actual Data: Units produced Direct Labor Standard Cost Data per 1 Unit Quantity Price 2 hrs $41/hr SHOW ALL COMPUTATIONS. 20 units 39 hrs; total cost $1560 Compute rate variance, efficiency variance, direct labor variance
- Direct Material Direct Labor Standard Cost Data per 1 Unit Quantity Price 3 lbs $2.00/lb 2 hrs $4.00/hr Actual Data: Units produced Material purchase & usage Direct Labor Show all computations. 25 100 lbs at $2.20 per lb 30 hrs; total cost $129 a) Compute price variance, quantity variance, direct material variance b) Compute rate variance, efficiency variance, direct labor varianceGiven on the following information, calculate the variable overhead rate variance. Actual variable overhead cost $15,500; Actual hours used 4,200, Standard hours allowed 4,000; and Standard variable overhead rate $3.75 per hour. O $500 F O $250 U O $250 F O $500 U ÎA company reports the following information for its direct labor. Actual hours of direct labor used Actual rate of direct labor per hour Standard rate of direct labor per hour Standard hours of direct labor for units produced AH = Actual Hours SH Standard Hours AR = Actual Rate SR Standard Rate Compute the direct labor rate and efficiency variances and identify each as favorable or unfavorable. Actual Cost $ 0 $ 74,000 $15 $14 75, 200 0 0 $ 0 Standard Cost
- Calculate the labor efficiency variance: Labor costs: Budgeted costs (per unit) 2.25 hours at € 16.40 per hour based on 350 units. Actual: Units: 310 Hours: 620 Labor cost: € 10, 540 a. €1, 435 favourable b. € 1,271 favourable c. € 899 favourable d. €1, 435 adverseInformation on Orman Company's direct labor costs is as follows:Standard direct labor rate $3.75, Actual direct labor rate $3.50, Standard direct labor hours 10,000, Direct labor usage (efficiency) variance—unfavorable P4,200. What were the actual hours worked, rounded to the nearest hour? 10,714 11,120 11,200 11,914Given the following information, calculate the purchasing department's efficiency variance. Standard number of transaction per day Standard labor cost per day Actual number of days for processing transactions Actual number of transactions processed Actual labor cost per day Multiple choice question. $2,400 favorable $4,400 favorable $4,400 unfavorable $2,400 unfavorable 20 $200 120 1,960 $180
- Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Standard Rate Standard per Hour $ 17.00 Hours Cost 18 minutes $ 5.10 During August, 5,750 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled $102,350 for the month. Required: 1. What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 20,000 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During August, the company incurred $21,850 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output Inputs Standard Price or Rate Direct materials $ 9.40 per ounce $ 18.00 per hour $ 5.30 per hour 7.6 ounces Direct labor 0.10 hours Variable manufacturing overhead 0.10 hours The company has reported the following actual results for the product for July: Actual output 7,600 units Raw materials purchased 63,000 ounces Actual cost of raw materials purchased $ 541,800 Raw materials used in production 57,750 ounces Actual direct labor-hours 820 hours $ 16,072 $ 4,592 Actual direct labor cost Actual variable overhead cost The labor efficiency variance for the month is closest to:Information on Wilbur Company's direct labor costs is as follows: P3.75 Standard direct labor rate 3.50 Actual direct labor rate 10,000 Standard direct labor hours Direct labor usage (efficiency) 4,200 variance-unfavorable What were the actual hours worked rounded to the nearest hour? a. 10,714 b. 11,120 C. 11,200 d. 11,914 O