Answer:
Instructions are below.
Explanation:
Giving the following information:
The direct labor standards for a particular product are 4 hours of direct labor at $12.00 per direct labor-hour
Actual:
3,350 units of this product were made
The labor cost incurred was $159,786 and 13,450 direct labor-hours were worked.
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
Standard quantity= 4*3,350= 13,400
Direct labor time (efficiency) variance= (13,400 - 13,450)*12
Direct labor time (efficiency) variance= $600 unfavorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 159,786/13,450= $11.88
Direct labor rate variance= (12 - 11.88)*13,450
Direct labor rate variance= $1,614 favorable
