Use the following information to complete Brief Exercises 10-25 and 10-26:
Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.03 hour. During the month of April, 900,000 bottles were produced using 25,200 labor hours @ $15.00. The standard wage rate is $13.50 per hour.
10-26 Labor Rate and Efficiency Variances
Refer to the information above for Tico Inc. on the previous page
Required:
Calculate the labor rate and efficiency variances using the columnar and formula approaches.
Compute the value of labor rate and efficiency variances with the help of columnar and formula approach.
Variance:
The amount obtained when actual cost is deducted from budgeted cost is known as variance. Variance is calculated to find whether the cost is over applied or under applied.
Use the following formula to calculate labor rate variance with the help of columnar approach:
Substitute $13.50 for standard rate, 25,200 hours for actual hours and $15 for actual rate in the above formula.
Therefore, the labor rate variance by columnar approach is $37,800 (U).
Use the following formula to calculate labor efficiency variance with the help of columnar approach:
Substitute $13.50 for standard rate, 25,200 hours for actual hours, $15 for actual rate and 27,000 hours for standard hours in the above formula.
Therefore, the labor efficiency variance by columnar approach is $24,300 (F)
Financial And Managerial Accounting
College Accounting, Chapters 1-27
Intermediate Accounting: Reporting And Analysis
Corporate Financial Accounting
Financial & Managerial Accounting
Accounting Information Systems
Financial Accounting
MKTG 12:STUDENT ED.-TEXT
Accounting Information Systems
Principles of Economics (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Foundations of Business (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Management, Loose-Leaf Version
Contemporary Marketing
Essentials of Economics (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Principles of Microeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Financial & Managerial Accounting
College Accounting (Book Only): A Career Approach
Financial Accounting
Accounting (Text Only)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting (Book Only): A Career Approach
Fundamentals of Financial Management (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
Statistics for Business & Economics, Revised (MindTap Course List)
Exploring Economics
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Corporate Financial Accounting
Survey of Accounting (Accounting I)
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Practical Management Science
Microeconomics
Economics (MindTap Course List)
Purchasing and Supply Chain Management
Macroeconomics
Economics For Today
Cornerstones of Cost Management (Cornerstones Series)