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

question 87

Essay

A company's direct labor standards for a given operation and the actual results for the current period are provided below:
Standard rates:
Class A: $24 per hour
Class B: $12 per hour
Time to produce one unit:
Three (3) Class A workers at 20 minutes each
Two (2) Class B workers at 15-minutes each
Actual Results:
Units produced: 6,000
Labor used:
5,800 hours of Class A workers; total payroll: $156,600
3,500 hours of Class B workers; total payroll: $49,000
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.

Understand the basic principles of accounting and the role of accounting in businesses.

Comprehend the differences between various types of business organizations and their characteristics.

Identify the users of accounting information and their specific needs.

Understand the key financial statements and their significance.

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Definitions:

Evolutionary Theory

A set of principles that explains the diversity of life on Earth by processes such as natural selection, adaptation, and speciation.

Optimal Health

A state of complete physical, mental, and social well-being, not just the absence of disease or infirmity, achieved by maintaining a balanced lifestyle.

Supply Chain

The entire process of producing and delivering a product or service, from the supplier of raw materials to the end user, including all the stages of transformation in between.

Units

A measure of quantity or amount, often used in the context of sales, production, or inventory.