Laurel Ltd is a high-volume manufacturer of three standard items of furniture. Production of each item is
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Laurel Ltd is a high-volume manufacturer of three standard items of furniture. Production of each item is overseen by its own supervisor. The business has recently invested in manufacturing technology to improve efficiency but is still in the process of finalizing new standard costs of production to reflect its new manufacturing capacity.
Data related to its last week of production are as follows:
| Units produced | Standard time per unit (Hours) |
Tables | 400 | 4.0 |
Chairs | 1,000 | 1.2 |
Wall units | 200 | 6.0 |
Actual hours worked | 5,600 |
Standard wages rate per hour | £4 |
Actual wages incurred | £20,160 |
- a. Discuss the advantages and disadvantages of variance analysis for Laurel Ltd.
- b. Calculate the following variances:
- i.direct labour total variance
- ii.direct labour rate variance
- iii.direct labour efficiency variance
Related Book For
Understanding Business Ethics
ISBN: 9781506303239
3rd Edition
Authors: Peter A. Stanwick, Sarah D. Stanwick
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