   Chapter 23, Problem 23.9EX

Chapter
Section
Textbook Problem

Direct labor variances La Barte Company manufactures commuter bicycles from recycled materials. The following data for July of the current year are available: Quantity of direct labor used 5,050 hrs. Actual rate for direct labor 516.80 per hr. Bicycles completed in July 1,000 bicycles Standard direct labor per bicycle 5.4 hrs. Standard rate for direct labor $16.00 per hr. a. Determine the direct labor rate variance, time variance, and total direct labor cost variance. b. How much direct labor should be debited to Work in Process? 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 direct labor rate variance. Explanation The direct labor rate variance is determined as follows: Direct labor rate variance = [(Actual rate per hourStandard rate per hour)× Actual hours]=[($16

b.

To determine

To identify: The amount of direct labor that should be debited to work in process.

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