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Parent Golf produces handmade golf clubs. The process is labor intensive. The speed at which a dub can be built depends on the skill level
Parent Golf produces handmade golf clubs. The process is labor intensive. The speed at which a dub can be built depends on the skill level of the individual worker Management has established a standard of labor hours per club. The standard wage rate is sit per hour. During a recent month. 1.500 custom dubs were produced. Management was pleased that only 5.100 labor hours were worked, however total wages amounted to $81.600. Compute the total variance for labor and determine how much is related to rate and efficiency components. Labor variances Actual hours of labor Actual rate Actual cost of direct labor 5 Output - number of clubs Standard hours per club Standard hours to achieve output Standard rate per hour Standard cost of direct labor Total labor variance (standard cost v. actual cost) Labor rate variance: Standard rate Actual rate $ $ Actual hours Unfavorable labor rate variance Labor efficiency variance: Standard hours Actual hours Standard rate Favorable labor efficiency variance
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