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Direct Labor Variances The following data relate to labor cost for production of 5,600 cellular telephones; Actual: 3,790 hrs. at $12.80 Standard: 3,730 hrs.
Direct Labor Variances The following data relate to labor cost for production of 5,600 cellular telephones; Actual: 3,790 hrs. at $12.80 Standard: 3,730 hrs. at $13.10 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using an unfavorable variance as a positive number. Rate variance Time variance Total direct labor cost variance x Favorable 786 Unfavorable x Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower have resulted in less efficient performance. Thus, the actual time required was more labor rate than planned. The lower level of experience or than standard. Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit) Favorable variances can be thought of as decreasing costs (a credit) The labor cost variance is the difference between the actual and standard labor cost Consider factors affecting labor performance
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