MA55 Problem: Variances - Brien Manufacturing Company
Prof.Nandy
MA55 Problem: Variances - Brien Manufacturing Company
Brien Manufacturing Company has a process cost accounting system. A monthly analysis comparesactual results with both a monthly plan and a flexible budget. Standard direct labour rates used in theflexible budget are established at the time the annual plan is formulated and held constant for the entireyear. Standard direct labour rates in effect for the fiscal year ending June 30 and standard hours allowedfor the output in April are:
Standard
Standard DLH
Rate Per Hour
Allowed For Output
Labour class III $8.00
500
Labour class II
$7.00
500
Labour class I $5.00
500
The wage rates for each labour class increased on January 1 under the terms of a new union contractnegotiated in December of the previous fiscal year. The standard wage rates were not revised to reflect thenew contract. The actual direct labour hours worked and the actual direct labour rates per hour experienced for the month of April were:
Actual
Direct Labour
Actual Direct
Rate Per Hour
Labour Hours
Labour class III $8.50
550
Labour class II $7.50
650
Labour class I $5.40
375
Required -
a. What is the total direct labour variance? b. What is the direct labour rate variance?c. What is the direct labour efficiency variance?d. What is the direct labour yield variance? (Round all standard prices to four decimal places.)e. What is the direct labour mix variance for April?
- 9 years ago
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