Question

Europa Company manufactures only one product. Presented below is direct labor information for November.Standard direct labor hours per unit of product 3.20Number of finished units produced 6,500Standard wage rate per direct labor hour (SP) $19.20Total direct labor payroll for the period $359,424Actual wage rate per direct labor hour worked (AP) $161. The actual direct labor hours worked (AQ) during November was:2. The total standard direct labor hours (SQ) in November for the output produced was:3.The direct labor rate variance for November (to two decimal places) was:4.direct labor efficiency variance for November (to two decimal places) was:

Answer 1

1. 22,464 hours

2. 20,800 hours

3. $71,884.80 Favorable

4. $31,948.80 Unfavorable

Step-by-step explanation:

Given that

Standard hours per unit = 3.20

Number of finished units = 6,500

Standard wage rate per hour = $19.20

Total direct labor payroll = $359,424

Actual wage rate per hour = $16

1. The computation of direct labor hours worked is shown below:-

Direct labor hours worked = Total labor cost ÷ Actual wage rate

= $359,424 ÷ 16

= 22,464 hours

2. The computation of total standard direct labor hours is here below:-

Total standard direct labor hours = Standard hours per unit × Actual units produced

= 3.20 × 6,500

= 20,800 hours

3. The calculation of direct labor rate variance is shown below:-

Direct labor rate variance = Actual hour × (Standard rate - Actual rate)

= 22,464 × ($19.2 - $16)

= 22,464 × $3.2

= $71,884.80 Favorable

4. The calculation of direct labor efficiency variance is shown below:-

Direct labor efficiency variance = Standard Rate × (Standard hour - Actual hours)

= $19.20 × (20,800 - 22,464)

= $19.20 × -$1,664

= $31,948.80 Unfavorable