Ellis Company’s labor information for September is as follows: Direct labor hourly rate paid $31.00 Total standard direct labor hours for units produced 10,000.00 Direct labor hours worked 9,850.00 Direct labor rate variance $7,387.50 (favorable) Round your answers to two decimal places. A. Compute the standard direct labor rate per hour. {$fill in the blank }standard rate B. Compute the direct labor time variance. Direct labor time variance {$fill in the blank } C. Compute the standard direct labor rate if the direct labor rate variance was $2,462.50 (unfavorable). {$fill in the blank } standard labor rate
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Ellis Company’s labor information for September is as follows:
| Direct labor hourly rate paid | $31.00 | |
| Total standard direct labor hours for units produced | 10,000.00 | |
| Direct labor hours worked | 9,850.00 | |
| Direct labor rate variance | $7,387.50 | (favorable) |
Round your answers to two decimal places.
A. Compute the standard direct labor rate per hour.
{$fill in the blank }standard rate
B. Compute the direct labor time variance.
Direct labor time variance {$fill in the blank }
C. Compute the standard direct labor rate if the direct labor rate variance was $2,462.50 (unfavorable).
{$fill in the blank } standard labor rate
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