Huron Company produces a commercial cleaning compound known as Zoom. The direct labour standards for one unit
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Question:
Huron Company produces a commercial cleaning compound known as Zoom. The direct labour standards for one unit of Zoom are given below:
Direct Labour for Standard Quantity or Hours= 0.4
hours
Direct Labour for Standard Price
or Rate= $
21.00
per hour
Direct Labour for Standard Cost= $
8.40
During the most recent month, the company produced only 1,360 units using 644 hours of direct labour time at an hourly rate of $19.00.
Required:
1.
Calculate the labour rate variance and state whether it is favourable or unfavourable.
2.
Calculate the labour efficiency variance and state whether it is favourable or unfavourable.
3.
One of the more experienced workers was replaced with a less experienced worker. Was this change worthwhile? Why or why not?
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