Use the Following Cost Information to Calculate the Direct Labor

question 87

Essay

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.
$\begin{array}{|l|r|}\hline\text { Actual costs and quantities: }\\\hline \text { Direct labor cost incurred ............ } & \$ 360,000 \\\hline \text { Direct labor hours used ........... } & 20,000 \text { hours } \\\hline \text { Units produced ................... } & 45,000 \text { units } \\\hline \text { Standard costs and quantities: } &\\\hline \text { Direct labor rate per hour } \ldots \ldots \ldots \ldots \ldots & \$ 16.50 \\\hline \text { hours produce one unit .......... }&0.5\\ \hline \end{array}$

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Definitions:

Non-current Liabilities

Non-current liabilities are obligations a company owes that are not expected to be paid within the next twelve months, including long-term loans, bond payables, and deferred tax liabilities.

Current Assets

Resources anticipated to be turned into cash, disposed of, or used up either within a year or over the course of the operating cycle, depending on which period extends further.

Liquidity

Refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.