Question

Japan Company produces lamps that require 3 standard hours per unit at an hourly rate of $13.10 per hour. Production of 6,100 units required 18,670 hours at an hourly rate of $12.70 per hour. What is the direct labor for the following: Enter favorable variances as negative numbers.

Answer 1

Instructions are below.

Step-by-step explanation:

Giving the following information:

Japan Company produces lamps that require 3 standard hours per unit at an hourly rate of $13.10 per hour.

Production of 6,100 units required 18,670 hours at an hourly rate of $12.70 per hour.

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

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

Direct labor time (efficiency) variance= (3*6,100 - 18,670)*13.1

Direct labor time (efficiency) variance= $4,847 unfavorable

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

Direct labor rate variance= (13.1 - 12.7)*18,670

Direct labor rate variance= $7,468 favorable