Question
I just need to know these parts Direct labor rate variance and Direct labor efficiency variance and please explain how you come up with those
I just need to know these parts Direct labor rate variance and Direct labor efficiency variance and please explain how you come up with those answers. I'm so confused.
Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton.
Management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided:
Budget | |
Cost of fruit @ 10 pounds per carton | $ 200,000 |
Cost of packaging @ 1 pound per carton | $ 10,000 |
Labor costs @ .5 hoursure per carton | $ 90,000 |
Total Cost | $ 300,000 |
Actual | |
Cost of fruit @ 10 pounds per carton | $ 244,200 |
Cost of packaging @ .55 pound per carton | $ 11,000 |
Labor costs @ .75 hoarse per carton | $ 150,000 |
Total Cost | $ 405,200 |
Unfavorable variance | $105,200.00 |
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