Question

The following information describes a company's usage of direct labor in a recent period! Actual Hours Used 22000Actual Rate per Hour 15Standard Rate per Hour 14 Standard Hours for Units Produced 23500The direct labor RATE variance is:__________. A. $21,000 Favorable B. $21,000 Unfavorable C. $22,000 Favorable D. $22,000 Unfavorable E. $23,500 Unfavorable The direct labor EFFICIENCY variance is:_______. A. $21,000 Favorable B. $21,000 Unfavorable C. $22,000 Favorable D. $22,000 Unfavorable E. $23,500 Unfavorable

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Actual Hours Used 22,000

Actual Rate per Hour 15

Standard Rate per Hour 14

Standard Hours for Units Produced 23,500

To calculate the direct labor rate and efficiency variance, we need to use the following formulas:

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Direct labor rate variance= (14 - 15)*22,000

Direct labor rate variance= $22,000 unfavorable

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (23,500 - 22,000)*14

Direct labor time (efficiency) variance= $21,000 favorable