Question
You have been given the following per unit information about the production of chain Inc., and are asked to provide the plant manager with information
You have been given the following per unit information about the production of chain Inc., and are asked to provide the plant manager with information for a meeting with the vice-president of operations with the following per unit data:
Direct labour:
Standard
Quantity. 2.5hr
Standard
Price $19.00/hr
Actual
Quantity 2.75 hrs
Actual
Price $18/hr
Production data for the year is as follows:
Actual production (units)56,000
Required:
Calculate the direct labour rate (also called price) and efficiency (also called usage) variances and use your solution to answer the following questions.
The amount of the direct labour rate variance, also called the direct labour price variance, is $____________.
Indicate if the direct labour rate variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
The amount of the direct labour efficiency variance, also called the direct labour usage variance, is $____________.
Indicate if the direct labour efficiency variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
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