The Following Direct Labor Standards Have Been Established for Product

question 3

Essay

The following direct labor standards have been established for product K62G:
The following data pertain to the most recent month's operations during which 3,040 units of product K62G were made:
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.
$\begin{array}{lrl} \text { Standard direct labor-hours.......... } &2.0& \text {hours per unit of K 62G } \\ \text { Standard direct labor wage rate.... } &\$13.60& \text { per hour}\\\end{array}$

$\begin{array}{lr}\text { Actual direct labor-hours worked } . . & 6,100 \\\text { Actual direct labor wages paid...... } & \$ 81,130\end{array}$

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Definitions:

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.

Marginal Product

The additional output derived from the use of one more unit of a production input, while holding other inputs constant.

Technologically Efficient

A state of production where it is not possible to increase the production of one good without decreasing the production of another, given current technology.

Autos Assembled

The total count or volume of automobiles manufactured and put together in a production process within a specific time frame.