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Managerial Accounting: Please explain how to get the values for AP, AQ,SP, SQ for direct labor variance. ABC Company ABC Company reports the following information
Managerial Accounting:
Please explain how to get the values for AP, AQ,SP, SQ for direct labor variance.
ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Cost Standard 2 lbs. @ $5.00 per pound 0.50 hours @ $8.00 per hour Actual 7,000 pounds purchased for $34,650 1,400 hours @ $7.95 per hour Labor 64. Refer to ABC Company. Calculate the total direct labor variance a. $70 F b. $200 U c. $270 U d. $130 U ANS: D SUPPORTING CALCULATIONS: $7.95 x 1,400 = $11,130 $70 F SP X AQ SP X SQ $8.00 X 1,400 $8.00 X (-50 x 2,750) = $11,200 = $11,000 _$200 U_ Direct labor price variance = $ 70 F Direct labor efficiency variance = $ 200 U Total direct labor variance = $ 130 UStep by Step Solution
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