3. Smith Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor) time spent on each return is 2 hours. The direct labor standard wage rate at the firm is $16.00 per hour. Last month, 1,980 direct labor hours were used to prepare 1,000 tax returns. Total wages were $33,660 Read the requirements Requirement 1. What is the actual (direct labor wage rate per hour paid last month? (Round your answer to the nearest cent.) The actual direct labor) wage rate per hour paid last month is Requirement 2. What is the direct labor rate variance? (Abbreviations used: DL = Direct labor) Begin by determining the formula for the rate variance, then compute the rate variance for direct labor. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorabie (F) or unfavorable (U).) (2) DL rate variance = Requirement 3. What is the direct labor efficiency variance? (Abbreviations used: DL = Direct labor) Determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) (5) (6) - DL officiency variance 3: hours Requirement 4. How might the direct labor rate variance for the firm last month be causing the direct labor efficiency variance? The (9) direct labor rate variance might mean that Smith hired (10) As a result, the return preparers (11) than the standard allows. This accounts for the (12) efficiency variance. 1: Requirements 1. What is the actual (direct labor) wage rate per hour paid last month? 2. What is the direct labor rate variance? 3. What is the direct labor efficiency variance? 4. How might the direct labor rate variance for the firm last month be causing the direct labor efficiency variance? (1) O Standard rate (2) O Standard rate Actual hours Actual hours Actual rate Actual rate Standard hours allowed O Standard hours allowed (3) Standard rate OOOO Actual hours Actual rate Standard hours allowed (4) O Standard rate OF Actual hours OU Actual rate Standard hours allowed Standard rate (8) a O Actual hours Actual rate Standard hours allowed (6) Standard rate (9) unfavorable favorable Actual hours Actual rate Standard hours allowed oo (10) O less qualified return preparers at a lower pay rate more qualified return preparers at a higher pay rate (11) O had to use more were able to use fewer (12) O favorable unfavorable
