Standard Costing at Boeing

• Values:

• Standard Labor Rate: $25 per hour
• Standard Hours per Unit: 10 hours
• Actual Labor Rate: $30 per hour
• Actual Hours per Unit: 12 hours
• Requirements:

0. Calculate the labor rate variance and efficiency variance for Boeing.
1. Analyze the causes of variances in labor costs.
2. Discuss how standard costing helps Boeing in cost control and performance evaluation.
3. Recommend improvements in Boeing’s standard costing system.