Direct Labor Variances

The Freedom Clothes Company produced 17,000 units during June of the current year. The Cutting Department used 3,200 direct labor hours at an actual rate of $13.90 per hour. The Sewing Department used 5,300 direct labor hours at an actual rate of $13.60 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $13.80. The standard labor time for the Cutting and Sewing departments is 0.20 hour and 0.30 hour per unit, respectively.

a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the Cutting Department and Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

	Cutting Department	Sewing Department
Rate variance	$ SelectFavorableUnfavorableItem 2	$ SelectFavorableUnfavorableItem 4
Time variance	$ SelectFavorableUnfavorableItem 6	$ SelectFavorableUnfavorableItem 8
Total direct labor cost variance	$ SelectFavorableUnfavorableItem 10	$ SelectFavorableUnfavorableItem 12

b. The two departments have opposite results. The Cutting Department has a(n) SelectfavorableunfavorableItem 13 rate and a(n) SelectfavorableunfavorableItem 14 time variance, resulting in a total SelectfavorableunfavorableItem 15 cost variance. In contrast, the Sewing Department has a(n) SelectfavorableunfavorableItem 16 rate variance, and has a very SelectfavorableunfavorableItem 17 time variance, resulting in a total SelectfavorableunfavorableItem 18 cost variance.