Question
Waltons Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The standard cost of labor is $7.70
Waltons Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The standard cost of labor is $7.70 per hour. The company planned to make 7,500 dolls during the year but actually used 11,550 hours of labor to make 8,400 dolls. The payroll amounted to $92,978.
Required
-
Should labor variances be based on the planned volume of 7,500 dolls or the actual volume of 8,400 dolls?
-
Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours.
-
Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).
-
Compute the labor usage variance and indicate whether it is favorable (F) or unfavorable (U).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started