Levram Company uses a standard costing system. During the past quarter, the following variances were computed: Variable
Question:
Variable overhead efficiency variance ....... $ 30,000 U
Direct labor efficiency variance ........ 40,000 U
Direct labor rate variance ............ 25,000 U
Levram applies variable overhead using a standard rate of $4 per direct labor hour allowed. Two direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, Levram used 15 percent more direct labor hours than should have been used.
Required:
1. What were the actual direct labor hours worked? The total hours allowed?
2. What is the standard hourly rate for direct labor? The actual hourly rate?
3. How many actual units were produced?
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Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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