Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: Standard direct labor rate per hour $15.00 Actual direct labor rate per hour $13.50 Labor rate variance $18,000 F Actual output 1,000 units Standard hours allowed for actual production 10,000 hours What is the total labor variance for Claire Company

Question

Ace Petty

Business

26 September, 21:52

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: Standard direct labor rate per hour $15.00 Actual direct labor rate per hour $13.50 Labor rate variance $18,000 F Actual output 1,000 units Standard hours allowed for actual production 10,000 hours What is the total labor variance for Claire Company

+2

Answers (1)

Know the Answer?

Ahmad Marshall · Answer 1

The answer is 12,000

Explanation:

Solution

Given that:

The labor rate variance = (SR-AR) * AH

Now,

(15-13.50) * AH = 18,000

so,

AH = 18000/1.50

Gives us,

=12,000

The total labor variance is = The standard labor cost - The actual labor costs.

= (10000 * 15) - (12,000 * 13.50)

=150,000 - 162,000

= 12,000 U

Therefore the total labor variance Claire Company is 12,000