Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

Question

Deon Morales

Business

14 March, 10:32

Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

+3

Answers (1)

Know the Answer?

Matteo Stein · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Sheridan Company's standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.

Direct labor efficiency variance = (SQ - AQ) * standard rate

Direct labor efficiency variance = (3,300hs - 2,970hs) * 11 = $3,630 favorable

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

Direct labor rate variance = (11 - 12.1) * 2,970 = $3,267 unfavorable