The Standards for Product F88W Specify 3

question 11

Essay

The standards for product F88W specify 3.4 direct labor-hours per unit at $13.00 per direct labor-hour. Last month 800 units of product F88W were produced using 2,500 direct labor-hours at a total direct labor wage cost of $30,500.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Expenditures

Money spent by an organization or individual for goods, services, or other purposes.

Policies

Guiding principles or rules designed to steer decisions and actions in an organization.

Broad Guidelines

General rules or principles that provide direction or advice on how to act in specific situations, without being overly detailed.