Levram Company uses a standard costing system. During the past quarter, the following variances were computed:Variable overhead efficiency variance ....... $ 30,000 UDirect labor efficiency variance ........ 40,000 UDirect labor rate variance ............ 25,000 ULevram 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
Levram Company uses a standard costing system. During the past quarter, the following variances were computed:
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?
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?
This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!
Answer
1. VOH efficiency variance = (AH SH)SVOR $30,000 = (1.15SH SH)$4 $30,000 = $0…View the full answer
Related Book For 
Cost Management Accounting and Control
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
ISBN: 978-0324559675