A Company's Direct Labor Standards for a Given Operation and the Actual

question 57

Essay

A company's direct labor standards for a given operation and the actual results for the current period are provided below:
Standard rates:
Advanced: $18 per hour
Trained: $15 per hour
Novice: $10 per hour

Actual Results:
Units produced: 4,000
Labor used:
2,200 hours of Advanced workers
4,300 hours of Trained workers
1,900 hours of Novice workers
Required:
(Be sure to indicate whether the variance is favorable or unfavorable. )
a.Compute the labor efficiency variances for each worker level.b.Compute the labor mix variances for each worker level.c.Compute the labor yield variances for each worker level.

---

Definitions:

Voucher System

An accounting system that involves preparing and approving vouchers before transactions are recorded and payments made, to ensure financial controls.

Control Procedures

Measures and policies implemented by a company to ensure the integrity of financial and accounting information and compliance with laws and regulations.

Cash Equivalents

Temporary investments which can quickly be converted into specific cash sums and have a negligible risk of value fluctuation.

Petty Cash Fund

A petty cash fund is a small amount of cash kept on hand by a business for making immediate payments for minor expenses, managed through a petty cash system.