e as favorable Requirements mpute the rate = 1. Compute the direct labor rate variance and the direct labor efficiency variance. 2. What is the total variance for direct labor? 3. Who is generally responsible for each variance? 4. Interpret the variances. fiance, then coi Print Done er label the va Standard Price and Volume - Direct materials (resin) 13 pounds per pot at a cost of $3.00 per pound Direct labor.. 3.0 hours at a cost of $21.00 per hour Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead $6.00 per direct labor hour $20,000 $5.00 per direct labor hour (DLH) Standard fixed MOH rate Actual Results Earthern Ware allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,400 flower pots: Direct materials Direct labor.. Purchased 19,640 pounds at a cost of $3.20 per pound; Used 19,040 pounds to produce 1,400 pots Worked 3.4 hours per flower pot (4,760 total DLH) at a cost of $19.00 per hour $6.30 per direct labor hour for total actual variable manufacturing overhead $29,988 $19,500 Actual variable manufacturing overhead.. Actual fixed manufacturing overhead Standard fixed manufacturing overhead allocated based on actual production $21,000 Requirement 1. Compute the direct labor rate variance and the direct labor efficiency variance. (Enter the variances as positive numbers. Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor) Begin with the direct labor rate variance. First determine the formula for the rate variance, then compute the rate variance for direct labor. x DL rate variance x Now compute the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. x DL efficiency variance x Requirement 2. What is the total variance for direct labor? (Enter the amount as a positive number. Label the variance as favorable (F) or unfavorable (U).) The total variance for direct labor is Requirement 3. Who is generally responsible for each variance? The variance. v department is responsible for the labor rate variance. The V department is responsible for the labor efficiency Requirement 4. Interpret the variances. The labor rate variance means that Elegance's employees earned per hour than budgeted. The vlabor efficiency variance means that it actually took direct labor hours than it should have to produce 1,400 pots
