# Direct labor variances Bellingham Company produces a product that requires 4 standard hours per unit at a standard hourly rate of $20 per hour. If 15,000 units required 61,800 hours at an hourly rate of$19.85 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) total direct labor cost variance?

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 23, Problem 23.2APE
Textbook Problem

## Direct labor variances Bellingham Company produces a product that requires 4 standard hours per unit at a standard hourly rate of $20 per hour. If 15,000 units required 61,800 hours at an hourly rate of$19.85 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) total direct labor cost variance?

Expert Solution

(a)

To determine

Direct labor variances:

The difference between the actual labor cost in the production and the standard labor cost for actual production is known as direct labor cost variance. The direct labor variance can be classified as follows:

• Labor rate variance.
• Labor time variance.

To determine: The labor rate variance.

### Explanation of Solution

The direct labor rate variance is determined as follows:

Direct labor rate variance = [(Actual rate per hourStandard rate per hour)× Actual hours]=[(\$19

Expert Solution

(b)

To determine
The labor time variance.

Expert Solution

(c)

To determine
The total labor cost variance.

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