Direct Labor Variances Ada Clothes Company produced 25,000 units during April. The Cutting Department used 4,800 direct labor hours at an actual rate of $11.80 per hour. The Sewing Department used 8,000 direct labor hours at an actual rate of $11.50 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.70. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Cutting Department Sewing Department Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance b. The two departments have opposite results. The Cutting Department has a(n) rate variance and a(n) time variance, resulting in a total cost variance. In contrast, the Sewing Department has a(n) rate variance but has a(n) time variance, resulting in a total cost variance. %24

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 10E: Ada Clothes Company produced 40,000 units during April. The Cutting Department used 12,800 direct...
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Direct Labor Variances
Ada Clothes Company produced 25,000 units during April. The Cutting Department used 4,800 direct labor hours at an actual rate of $11.80 per hour. The Sewing
Department used 8,000 direct labor hours at an actual rate of $11.50 per hour. Assume there were no work in process inventories in either department at the beginning
or end of the month. The standard labor rate is $11.70. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively.
a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable
variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Cutting Department
Sewing Department
Direct Labor Rate Variance
Direct Labor Time Variance
Total Direct Labor Cost Variance
b. The two departments have opposite results. The Cutting Department has a(n)
rate variance and a(n)
time variance,
resulting in a total
cost variance. In contrast, the Sewing Department has a(n)
rate variance but has a(n)
time variance, resulting in a total
cost variance.
%24
Transcribed Image Text:Direct Labor Variances Ada Clothes Company produced 25,000 units during April. The Cutting Department used 4,800 direct labor hours at an actual rate of $11.80 per hour. The Sewing Department used 8,000 direct labor hours at an actual rate of $11.50 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.70. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Cutting Department Sewing Department Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance b. The two departments have opposite results. The Cutting Department has a(n) rate variance and a(n) time variance, resulting in a total cost variance. In contrast, the Sewing Department has a(n) rate variance but has a(n) time variance, resulting in a total cost variance. %24
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