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a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).

a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...
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16 Fanning's Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The standard cost of labor is $7.71 per hour. The company planned to make 8,700 dolls during the year but actually used 13,650 hours of labor to make 9,500 dolls. The payroll amounted to $110,156. Required a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U). d. Compute the labor usage variance and indicate whether it is favorable (F) or unfavorable (U). Complete this question by entering your answers in the tabs below. Req C and D Req A Req B Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? Labor variances should be based on the < Req A Req B >
Transcribed Image Text:16 Fanning's Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The standard cost of labor is $7.71 per hour. The company planned to make 8,700 dolls during the year but actually used 13,650 hours of labor to make 9,500 dolls. The payroll amounted to $110,156. Required a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U). d. Compute the labor usage variance and indicate whether it is favorable (F) or unfavorable (U). Complete this question by entering your answers in the tabs below. Req C and D Req A Req B Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? Labor variances should be based on the < Req A Req B >
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