Standard and Actual Costs for Direct Labor for the Manufacture

question 95

Essay

Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:
Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.

---

Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Short-Term Notes Receivables

Short-duration financial assets representing amounts owed to a company that must be paid within a year.

Allowance Account

An accounting practice used to create a buffer for potential future losses on receivables, also known as a provision for doubtful debts.

Gross Realizable Value

The estimated selling price of goods minus any costs associated with the completion and sale of those goods.