InterviewSolution
Saved Bookmarks
| 1. |
Standard cost of product is : (20) Time : 6 hours per unit Rate : Rs 4 per hour Actual cost : Production 1,500 units Hours taken 7,600 units Idle time (in hours) 400 Total hours : 8,000 Total labour cost announced to Rs. 40,000. Calculate Labour Variance. |
| Answer» ECT labour variance is 5600 RsExplanation:We are given that: RATE = Rs.4/hour Actual cost of production = 1500 units Time = 6 hours Hours taken = 7600 hours Idle Time = 400 hours Total hours = 8000 hours Direct Labor Cost Variance = ( ST × SR ) - (AT - AR) = (9000 x 4) - (8000 x 5) = 4000 Rs.ST= Standard Time = 1500 units × 6 hours = 9000 units.(ii) Direct Labor Rate Variance = AT(SR - AR) = 8000 ( 4 - 5) = 8000 Rs. (iii) Direct Labor Idle Time Variance = IT × SR =400 × 4 = 1600 Rs. ( This is UNFAVORABLE)(IV) Direct Labor Efficiency Variance = SR(ST- AT) =4 (9000 - 7600) = 5600 Rs. | |