Swan Company has a direct labor standard of 15 hours per unit of output. Each employee has a standard wage rate of $14 per hour. During March, employees worked 13,100 hours. The direct labor rate variance was $9,170 favorable, the direct labor efficiency variance was $15,400 unfavorable. What was the actual payroll?

the actual payroll is $189,630

Explanation:

Calculation of Standard Payroll Cost

Standard Payroll Cost (flexed) = 13,100 hours*$14 per hour

= $183,400

Reconciling the Standard Payroll Cost to Actual Payroll Cost

Standard Payroll Cost (flexed) $183,400

Add unfavorable direct labor efficiency variance $15,400

Less favorable direct labor rate variance ($9,170)

Actual Payroll Cost 189,630