Labor Rate and Efficiency Variances Keck Company's direct labor costs to manufacture its only product in October follow:
|
Standard direct labor hours per unit of product
|
1.5
|
|
Number of finished units produced
|
10,000
|
|
Standard wage rate per direct labor hour
|
$16
|
|
Total payroll for direct labor
|
$207,000
|
|
Wage paid per direct labor hour
|
$18
|
Differences in hourly wage rates reflect skill levels of workers.
Required: Determine the following for October:
1. Direct labor rate variance.
2. Direct labor efficiency variance.
3. Production manager's performance in managing direct labor costs.