A Company's Direct Labor Standards for a Given Operation and the Actual

question 42

Essay

A company's direct labor standards for a given operation and the actual results for the current period are provided below:
Standard rates:
Level One: $20 per hour
Level Two: $15 per hour
Time to produce one unit:
Two (2) Level One workers at 15-minutes each
Three (3) Level Two workers at 10 minutes each
Actual Results:
Units produced: 10,000
Labor used:
4,000 hours of Level One workers at $25 per hour
6,800 hours of Level Two workers at $15 per hour
Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the labor rate variances for each worker level.
b. Compute the labor efficiency variances for each worker level.
c. Compute the labor mix variances for each worker level.
d. Compute the labor yield variances for each worker level.

---

Definitions:

Color Vision

Color vision is the capability of an organism to distinguish objects based on the wavelengths (or frequencies) of the light they reflect, emit, or transmit.

Weber's Law

A principle in psychophysics stating that the smallest change in a stimulus that can be detected is a constant proportion of the baseline stimulus.

Noticeable Difference

The smallest change in a stimulus that can be detected by the senses.

Minimum Change

The least alteration that can occur in a situation or in the value of a variable.