Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some
Question:
Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,000, and the total direct labor budget variance was $900 unfavorable. The standard labor rate was $15 per hour, but recent resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate variance of $3,600 for August.
Required:
a. Calculate the actual direct labor rate paid per hour during August.
b. Calculate the dollar amount of the direct labor efficiency variance for August.
c. Calculate the standard direct labor hours allowed for the actual level of activity during August. Use the formula for the quantity variance and solve for the missing information.
Step by Step Answer:
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele