Use the Following Cost Information to Calculate the Direct Labor

question 112

Essay

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

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Definitions:

Production Cost Report

A document detailing the total cost, including materials, labor, and overhead, associated with producing a batch of goods.

Manufacturing Cost

The total cost related to producing a product, including raw materials, labor, and overhead expenses incurred during the manufacturing process.

Equivalent Units

A concept in process costing that represents the amount of finished goods units that could have been produced given the amount of work done on the unfinished goods.

Production Cost Report

A document detailing the total cost involved in manufacturing a product, including materials, labor, and overhead.