LIET, Corp. is a manufacturer that makes a single product. The firm uses a standard costing system and has provided the following data for May: Actual number of units of output produced 5,000 units Standard DL hours 7,520 DL hours Standard Labor Rate $15.00 per DL hour DL efficiency variance $1,875F DL cost variance $5,520U Calculate the Actual rate (AR) for direct labor. a. $15.50 b. $16.00 c. $14.00 d. $14.50 e. $15.00
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.
LIET, Corp. is a manufacturer that makes a single product. The firm uses a
|
Actual number of units of output produced |
5,000 units |
|
Standard DL hours |
7,520 DL hours |
|
Standard Labor Rate |
$15.00 per DL hour |
|
DL efficiency variance |
$1,875F |
|
DL cost variance |
$5,520U |
Calculate the Actual rate (
| a. |
$15.50 |
|
| b. |
$16.00 |
|
| c. |
$14.00 |
|
| d. |
$14.50 |
|
| e. |
$15.00 |
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