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.

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Related Book For  book-img-for-question

Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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