Problem:
Selected data relating to Dana Corp’s operations for April are given below:
Number of units produced…. 500 Units
Number of actual direct labor hours worked… 1,400 Hours
Total actual direct labor cost…. $10,850
The standard cost card indicates that 2.5 hours of direct labor time is allowed per unit, at a rate of $8 per hour.
Q1. Complete the following analysis of direct labor cost for the month:
Actual Hours of Input Actual Hours of Input Standard Hours allowed for
at the Actual Rate at the Standard Rate Output at the Standard Rate
(AH x AR) (AH x SR) (SH x SR)
_____________ _____________ _____________
_____________ _____________ _____________
_____________ _____________ _____________
Q2. Redo the above analysis of direct labor cost for the month, using the following formulas:
Labor rate variance = AH(AR – SR)
Labor efficiency variance = SR(AH – SH)