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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

Question

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Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

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Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

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Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

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Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

Answer 6

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

Answer 7

Chapter 23, Problem 23.5BPR

1.

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 direct labor time variance, if the department had typed 81,900 lines according to the original plan.

Answer 8

1.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Direct labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (3))× Standard rate per hour]=[(120 hours−117 hours)× $23 per hour]=[3 hours× $23 per hour]=$69 (1)

Actual labor hours=(Number of employees×Number of labor hours per week)=3 employees×40 hours=120 hours (2)

(Standard direct labor hours)=(Number of lines typedStandard labor time per hour)=81,900 lines700 lines per hour=117 hours (3)

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

The direct labor time variance is $69 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

Answer 13

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

Answer 14

2.

To determine

The actual labor time variance, as a result of typing 88,900 lines.

Answer 15

2.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (2)−Standard direct labor hours (5))× Standard rate per hour]=[(120 hours−127 hours)× $23 per hour]=[(7) hours× $23 per hour]=$(161) (4)

(Standard direct labor hours for actual production)=(Number of lines typedStandard labor time per hour)=88,900 lines700 lines per hour=127 hours (5)

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Conclusion

The direct labor time variance is $(161) and it is a favorable variance, since the actual direct labor hour is lesser than the standard direct labor hour.

Answer 20

3.

To determine

The direct labor rate variance as a result of the bonus.

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

Answer 21

3.

To determine

The direct labor rate variance as a result of the bonus.

Answer 22

3.

Expert Solution

Explanation of Solution

Determine the direct labor rate variance.

Direct labor rate variance = [(Actual rate per hour−Standard rate per hour)× Actual hours (2)]=[($30−$23)×120 hours]=$7×120 hours=$840 (6)

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Conclusion

The direct labor rate variance is $840 and it is an unfavorable variance, since the actual rate per hour is more than the standard rate per hour.

Answer 27

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

Answer 28

4.

To determine

The labor time variance in the first week if a new employee had been hired from the employment firm.

Answer 29

4.

Expert Solution

Explanation of Solution

Determine the direct labor time variance.

Actual labor time variance} = [(Actual direct labor hours (8)−Standard direct labor hours (5))× Standard rate per hour]=[(160 hours−127 hours)× $23 per hour]=[33 hours× $23 per hour]=$759 (7)

Actual labor hours=(Number of employees×Number of labor hours per week)=4 employees×40 hours=160 hours (8)

Answer 30

4.

Expert Solution

Answer 31

4.

Expert Solution

Answer 32

Expert Solution

Answer 33

Conclusion

The direct labor time variance is $759 and it is an unfavorable variance, since the actual direct labor hour is more than the standard direct labor hour.

Answer 34

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

Answer 35

5.

To determine

To identify: The better decision between paying the bonus, and hiring another transcriptionist.

Answer 36

5.

Expert Solution

Answer to Problem 23.5BPR

Paying the bonus is the better decision when compared to hiring another transcriptionist as paying the bonus is less costly.

Answer 37

5.

Expert Solution

Answer 38

5.

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

Determine the total direct labor cost time variance.

Total direct labor cost variance = (Direct labor rate variance (4) +Direct labor time variance (6))= $(161)+$840 =$ 679 (9)

The direct labor cost variance for paying the bonus is $679 (9) and it is an unfavorable variance, since the direct labor rate variance is more than the direct labor time variance. The labor cost variance in hiring another transcript would have been $759 (7) which is unfavorable, which is more than the cost of paying the bonus.

Answer 41

Conclusion

Hence, the net benefit of paying the bonus when compared to hiring another transcriptionist is $80 $679(9)−$759 (7) .

Answer 42

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.

Thus, the manager should consider the quality of the work also beside considering the efficiency of doing the work.

Answer 43

6.

To determine

To explain: The performance-related issues that the labor time, and rate variances fail to consider, if any.

Answer 44

6.

Expert Solution

Explanation of Solution

The performance-related issues that the labor time and rate variances fail to consider are as follows:

The number of errors in the report from the fatigue of the typist is failed to be considered by the labor time and rate variances. If a report has many errors, then it will require more time for correcting such errors at a later date.
In addition to this, errors in the report may lead to draw incorrect conclusions by the doctors from the test analyses.