Use this information for Taylor Company to answer the questions that follow.
The following data are given for Taylor Company:
Overhead is applied based on standard labor hours.
-Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:
Actual costs950 hours at $37
Standard costs975 hours at $36?
Determine the direct labor (a) time variance, (b) rate variance, and (c) total direct labor cost variance.
Definitions:
Variable Cost
Expenses that vary depending on the amount of products or services a company generates.
Fixed Costs
Expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.
Cash Flow
The full measure of money movement into and out of an organization, primarily altering its liquidity status.
Discount Rate
The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the risk and time value of money.
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