Direct Labor Variances
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 1PB: Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a...
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Concept explainers
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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![Direct Labor Variances
Glacier Bicycle Company manufactures commuter
bicycles from recycled materials. The following data for
October of the current year are available:
Quantity of direct labor used
Actual rate for direct labor
Bicycles completed in October
Standard direct labor per bicycle
Standard rate for direct labor
Direct Labor Rate Variance
Direct Labor Time Variance
640 hrs.
$12.40 per hr.
300 bicycles
a. Determine for October the direct labor rate variance,
direct labor time variance, and total direct labor cost
variance. Enter a favorable variance as a negative
number using a minus sign and an unfavorable variance
as a positive number.
Total Direct Labor Cost Variance
2 hrs.
$12.60 per hr.
b. How much direct labor should be debited to Work in
Process?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe8dbb38b-67db-4869-a2fb-b3f37c286b0c%2F572351db-58f8-4a47-befb-15837e900f8c%2F7iaypvs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Direct Labor Variances
Glacier Bicycle Company manufactures commuter
bicycles from recycled materials. The following data for
October of the current year are available:
Quantity of direct labor used
Actual rate for direct labor
Bicycles completed in October
Standard direct labor per bicycle
Standard rate for direct labor
Direct Labor Rate Variance
Direct Labor Time Variance
640 hrs.
$12.40 per hr.
300 bicycles
a. Determine for October the direct labor rate variance,
direct labor time variance, and total direct labor cost
variance. Enter a favorable variance as a negative
number using a minus sign and an unfavorable variance
as a positive number.
Total Direct Labor Cost Variance
2 hrs.
$12.60 per hr.
b. How much direct labor should be debited to Work in
Process?
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