Use the Following Cost Information to Calculate the Direct Labor

question 174

Essay

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

---

Definitions:

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products, traditionally identified as product, price, place, and promotion.

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products, typically summarized as product, price, place, and promotion.

Profitability Numbers

Financial metrics used to assess the degree to which a company generates profit from its operations.

Profitability

The financial gain made by a business, calculated as total revenues minus total costs.