moonkhan209
Jul 19, 2011, 09:32 AM
After evaluating Zero Company's manufacturing process, management decides to establish standards of 4.0 hours of direct labor per unit of product and $16 per hour for the labor rate. During October, the company uses 16,900 hours of direct labor at a $256,880 total cost to produce 5,600 units of product. In November, the company uses 19,500 hours of direct labor at a $304,200 total cost to produce 5,800 units of product.
Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months.
Rate Variance= 16,900x16-256880=
Efficiency Variance=()x16=
I am very confused about Efficiency Variance. Does anybody have any idea what Standard Quantity should I use to come with correct answer for Efficiency Variance. Very very confused, Please help
Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months.
Rate Variance= 16,900x16-256880=
Efficiency Variance=()x16=
I am very confused about Efficiency Variance. Does anybody have any idea what Standard Quantity should I use to come with correct answer for Efficiency Variance. Very very confused, Please help