Hoist Inc. manufactures garage doors for homes. The standard quantity of direct labor to manufacture a door
Question:
Calculate the following, using the "goalpost" diagram format shown in Figure 8-4 to compute variances:
In Figure 8-4
1. Labor rate variance.
2. Labor efficiency variance.
3. Net laborvariance.
Transcribed Image Text:
Materiale Variances Actual cost (Actual quantity used x actual price per unit) Actual quantity usedX ctandard price per unit Equivalent production × standard quantity per unit × standard price 11,000 lbs. x 3.80 S41.800 11,000 lbs. X $4.00 $44,000 10,000 units × 1 lb. x $4 $40,000 Materials Price Variance $2,200 F Materials Quantity Variance $4.000 U Not Materials Variance $1,800 U Labor Variarices Actual hours (Actual hours worked actual rate per hour) 4,500 hrs. × $11 $49,500 Actual hours worked x standard rate per hour 4,500 hrs. $10 $45,000 Equivalent production x standard hours per unit X standard rate 10,000 units × 0.5 h. × $10 = S50.000 Labor Rate Variance $4,500 U Labor Efficiency Variance $5,000 F Net Labor Variance S500 F
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