Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $2.25) $4.50 Direct labor (2 hours @ $10) $20.00 Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50. Refer to Figure 10-5. What is Seaside's labor rate variance? $180,000 F $180,000 U $225,000 U $217,500 F
Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $2.25) $4.50 Direct labor (2 hours @ $10) $20.00 Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50. Refer to Figure 10-5. What is Seaside's labor rate variance? $180,000 F $180,000 U $225,000 U $217,500 F
Cornerstones of Cost Management (Cornerstones Series)
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Chapter2: Basic Cost Management Concepts
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Problem 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...
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Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: | |
Direct materials (2 pieces of wood @ $2.25) |
$4.50
|
Direct labor (2 hours @ $10) |
$20.00
|
Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50. | |
Refer to Figure 10-5. What is Seaside's labor rate variance?
$180,000 F
|
||
$180,000 U
|
||
$225,000 U
|
||
$217,500 F
|
Expert Solution
Step 1
Formula:
Labor rate variance = ( Actual rate - standard rate ) x Actual quantity
Deducting standard rate from actual rate which to be multiplied with actual quantity to derive the labor rate variance.
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