A company's direct labor standards for a given operation and the actual results for the current period
Question:
A company's direct labor standards for a given operation and the actual results for the current period are provided below:
Standard rates:
Advanced $18 per hour
Trained $15 per hour
Novice $10 per hour
Time to produce one unit:
One (1) Advanced worker at 30 minutes each = 30 minutes/unit
Three (3) Trained workers at 20 minutes each = 60 minutes/unit
Two (2) Novice workers at 15 minutes each = 30 minutes/unit
120 minutes/unit
Actual Results:
Units produced: 4,000
Labor used:
2,200 hours of advanced workers
4,300 hours of trained workers
1,900 hours of Novice workers
Required
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the labor efficiency variances for each worker level.
b. Compute the labor mix variances for each worker level.
c. Compute the labor yield variances for each worker level.
Step by Step Answer:
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins