Labor Rate and Efficiency Variances
Response to the following problem:
To produce one unit of Product CD requires eight hours of labor at a standard cost per hour of $21.00. During the month of September, 5,000 units were produced. Actual hours and costs for the month are as follows:
Actual direct labor hours.....................................38,400
Actual direct labor costs.......................................$844,800
1. Compute the actual cost per hour of direct labor for the month of September.
2. Compute the labor rate variance.
3. Compute the labor efficiency variance.