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Vivacious Violins Co. manufactures one type of hand-crafted violin. The company employs two types of employees, expert craftsmen and apprentice craftsmen. Vivacious Violins Co. uses
Vivacious Violins Co. manufactures one type of hand-crafted violin. The company employs two types of employees, expert craftsmen and apprentice craftsmen. Vivacious Violins Co. uses a standard costing system to track variances between expected costs and actual costs. At the beginning of each month, the company creates a static budget to forecast the cost of the direct labor that will be used during the month. On February 1, 2021, the company's team of cost accountants created the following static budget for direct labor costs during the month of February 2021: | |||||||
Budgeted number of violins | Standard labor hours per violin | Standard cost per labor hour | Standard cost per violin | Total cost | |||
Expert craftsmen | 50 | 20 | $ 100.00 | $ 2,000 | $ 100,000 | ||
Apprentice craftsmen | 50 | 40 | $ 25.00 | $ 1,000 | $ 50,000 | ||
Total cost | $ 3,000 | $ 150,000 | |||||
The company's actual direct labor costs during the month of February 2021 are summarized below: | |||||||
Actual number of violins | Actual labor hours per violin | Actual cost per labor hour | Actual cost per violin | Total cost | |||
Expert craftsmen | 60 | 18 | $ 105.00 | $ 1,890 | $ 113,400 | ||
Apprentice craftsmen | 60 | 38 | $ 28.00 | $ 1,064 | $ 63,840 | ||
Total cost | $ 2,954 | $ 177,240 |
Find the labor rate variance, labor mix variance, and labor yield variance.
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