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Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have
Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: Standard Hours 12 minutes (0.20 hours) Standard Rate Standard per Hour Cost $17.00 $3.40 During July, 3,350 hours of direct labour time were recorded to make 16,000 units. The direct labour cost totalled $54,270 for the month. Required: 1-a. What direct labour cost should have been incurred to make the 16,000 speakers? (Do not round intermediate calculations.) Direct labour cost 1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) 1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Total variance 2. Break down the difference in cost from requirement 1-b above into a labour rate variance and a labour efficiency variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (.e., zero variance).) Labour rate variance Labour efficiency variance
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