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A Company's Direct Labor Standards for a Given Operation and the Actual

Question 131

Essay

A company's direct labor standards for a given operation and the actual results for the current period are provided below:
Standard rates:
Class A: $24 per hour
Class B: $12 per hour
Time to produce one unit:
Three (3) Class A workers at 20 minutes each
Two (2) Class B workers at 15-minutes each
Actual Results:
Units produced: 6,000
Labor used:
5,800 hours of Class A workers; total payroll: $156,600
3,500 hours of Class B workers; total payroll: $49,000
Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the labor rate variances for each worker level.
b. Compute the labor efficiency variances for each worker level.
c. Compute the labor mix variances for each worker level.
d. Compute the labor yield variances for each worker level.

Correct Answer:

verifed

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a.Class A: $156,600 − (5,800 × $24) = $1...

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