Labor Rate and Efficiency Variances Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.026 hour. During the month of April, 1,000,000 bottles were produced using 25,000 labor hours @ $17.00. The standard wage rate is $15.00 per hour. Required: Calculate the labor rate and efficiency variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable. Labor rate variance 50,000 v Unfavorable Labor efficiency variance 11,050 x Favorable
Labor Rate and Efficiency Variances Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.026 hour. During the month of April, 1,000,000 bottles were produced using 25,000 labor hours @ $17.00. The standard wage rate is $15.00 per hour. Required: Calculate the labor rate and efficiency variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable. Labor rate variance 50,000 v Unfavorable Labor efficiency variance 11,050 x Favorable
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 26BEA: Use the following information to complete Brief Exercises 10-25 and 10-26: Tico Inc. produces...
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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.
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Transcribed Image Text:Labor Rate and Efficiency Variances
Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.026 hour. During the month of
April, 1,000,000 bottles were produced using 25,000 labor hours @ $17.00. The standard wage rate is $15.00 per hour.
Required:
Calculate the labor rate and efficiency variances using the columnar and formula approaches. Enter amounts as positive
numbers and select Favorable or Unfavorable.
Labor rate variance
50,000 v Unfavorable v
Labor efficiency variance
11,050 x Favorable v
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