Austin Music manufactures harmonicas. Austin uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and only partial data for November exist. Austin knows that the total direct labor variance for the month was $360 F and that the standard labor rate was $9 per hour. A recent pay cut caused a favorable labor rate variance of $0.70 per hour. The standard direct labor hours for actual November outputs were 5,850. Rel A Requirements A - the rked 1. Find the actual number of direct labor hours worked during November. First, find the actual direct labor rate per hour. Then, determine the actual number of direct labor hours worked by setting up the computation of the total direct labor variance as given. 2. Compute the direct labor rate and efficiency variances. Do these variances suggest that the manager may have made trade-offs? Explain. 8.3 bas Print Done Austin Music manufactures harmonicas. Austin uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and only partial data for November exist. Austin knows that the total direct labor variance for the month was $360 F and that the standard labor rate was $9 per hour. A recent pay cut caused a favorable labor rate variance of $0.70 per hour. The standard direct labor hours for actual November outputs were 5,850. Read the requirements. favorable (F) or unfavorable (U).) Austin Music Schedule to Compute Actual Direct Labor Hours Flexible budget Flexible Actual for actual output budget variance Direct labor hours Cost per hour Total direct labor cost Flexible budget variance Choose from any list or enter any number in the input fields and then continue to the next questior Austin Music manufactures harmonicas. Austin uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and only partial data for November exist. Austin knows that the total direct labor variance for the month was $360 F and that the standard labor rate was $9 per hour. A recent pay cut caused a favorable labor rate variance of $0.70 per hour. The standard direct labor hours for actual November outputs were 5,850. Read the requirements. Requirement 2. Compute the direct labor rate and efficiency variances. Do these variances suggest that the manager may have made trade-offs? Explain. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor.) Begin by determining the formula for the price variance, then compute the price variance for direct labor. x J) = DL rate variance Tv Now determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. Austin Music manufactures harmonicas. Austin uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and only partial data for November exist. Austin knows that the total direct labor variance for the month was $360 F and that the standard labor rate was $9 per hour. A recent pay cut caused a favorable labor rate variance of $0.70 per hour. The standard direct labor hours for actual November outputs were 5,850. Read the requirements. Now determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. DL efficiency variance Do these variances suggest that the manager may have made trade-offs? Explain. The direct labor rate variance combined with the direct labor efficiency variance suggests that the manager may have used workers. However, due to the overall net effect, it appears there was
