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b-22.06.xlsxProblem
| Custom Clubs produces handmade golf clubs. The process is labor intensive. The speed at which a club can be built depends on the skill level of the individual worker. Management has established a standard of 2 labor hours per club. The standard wage rate is $12 per hour. During a recent month, 2,500 custom clubs were produced. Management was pleased that only 4,900 labor hours were worked; however, total wages amounted to $63,700.
Compute the total variance for labor, and determine how much is related to rate and efficiency components.
Larry Walther: Larry Walther: B-22.06 |
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Worksheet
| Labor variances: | |||
|
Larry Walther: Larry Walther: B-22.06 | Actual Labor Cost | ||
| Actual hours of labor | - | ||
| Actual rate | $ - | ||
| Actual cost of direct labor | $ - | ||
| Standard Labor Cost | |||
| Output - number of clubs | - | ||
| Standard hours per club | $ - | ||
| Standard hours to achieve output | - | ||
| Standard rate per hour | $ - | ||
| Standard cost of direct labor | $ - | ||
| Total labor variance (standard cost v. actual cost) | $ - | ||
| Labor rate variance: | |||
| Standard rate | $ - | ||
| Actual rate | - | ||
| $ - | |||
| Actual hours | - | ||
| Unfavorable labor rate variance | $ - | ||
| Labor efficiency variance: | |||
| Standard hours | - | ||
| Actual hours | - | ||
| - | |||
| Standard rate | $ - | ||
| Favorable labor efficiency variance | $ - |
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