lue Box Beach Chairs has the following standards to make beach chairs: Standard Quantity Standard Price Direct materials 2.2 pounds of polywood per chair $3.50 per pound Direct labor 0.65 hours per chair $13.00 per hour The static budget was based on the production of 6,200 beach chairs. The company used 13,000 pounds of polywood in order to make 6,000 chairs in April. The company purchased 7,000 pounds of polywood at a total cost of $24,150. It also used 3,840 labor hours at a cost of $12.70 per hour. How much is the direct labor rate variance

Question

Marc Haas

Business

29 June, 03:50

lue Box Beach Chairs has the following standards to make beach chairs: Standard Quantity Standard Price Direct materials 2.2 pounds of polywood per chair $3.50 per pound Direct labor 0.65 hours per chair $13.00 per hour The static budget was based on the production of 6,200 beach chairs. The company used 13,000 pounds of polywood in order to make 6,000 chairs in April. The company purchased 7,000 pounds of polywood at a total cost of $24,150. It also used 3,840 labor hours at a cost of $12.70 per hour. How much is the direct labor rate variance

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Answers (1)

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Martin · Answer 1

Direct labor rate variance = $1,152 favorable

Explanation:

Giving the following information:

Standard Direct labor rate = $13.00 per hour

It used 3,840 labor hours for $12.70 per hour.

To calculate the direct labor rate variance, we need to use the following formula:

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

Direct labor rate variance = (13 - 12.7) * 3,840 = $1,152 favorable