The Standards for Product A22G Specify 8

question 6

Essay

The standards for product A22G specify 8.2 direct labor-hours per unit at $11.90 per direct labor-hour.Last month 200 units of product A22G were produced using 1,700 direct labor-hours at a total direct labor wage cost of $20,060.

Required:

a.What was the labor rate variance for the month?
b.What was the labor efficiency variance for the month?
c.Prepare a journal entry to record direct labor costs during the month,including the direct labor variances.

---

Definitions:

Net Operating Income

A measure of a company's or property's profitability after subtracting all operating expenses from the revenue generated from operations.

Planning Budget

is a financial plan developed based on projected activity levels and expected revenues and expenses, providing a framework for future operations.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate financial planning and analysis.

Materials

Raw inputs or components that are used in the manufacturing process to produce finished goods.