Direct Labor Variances Greeson Clothes Company produced 16,000 units during June of the current year. The Cutting Department used 3,000 direct labor hours at an actual rate of $11.50 per hour. The Sewing Department used 5,000 direct labor hours at an actual rate of $11.20 per hour. Assume that there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.40. The standard labor time for the Cutting and Sewing departments is 0.20 hour and 0.30 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the Cutting Department and 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 and a(n) time variance, resulting in a total cost variance. In contrast, the Sewing Department has a(n) rate variance but has a cost variance. time variance, resulting in a total
Direct Labor Variances Greeson Clothes Company produced 16,000 units during June of the current year. The Cutting Department used 3,000 direct labor hours at an actual rate of $11.50 per hour. The Sewing Department used 5,000 direct labor hours at an actual rate of $11.20 per hour. Assume that there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.40. The standard labor time for the Cutting and Sewing departments is 0.20 hour and 0.30 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the Cutting Department and 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 and a(n) time variance, resulting in a total cost variance. In contrast, the Sewing Department has a(n) rate variance but has a cost variance. time variance, resulting in a total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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