Standard cost of product is : time: 6 hours per unit,
Answers
Step-by-step explanation:
Time = 6 hours
Rate = Rs.4/hour
Actual cost of production = 1500 units
Hours taken = 7600 hours
Idle Time = 400 hours
Total hours = 8000 hours
(i) Direct Labor Cost Variance = ( ST × SR ) - (AT - AR)
=(9000*4) - (8000*5)
= Rs. 4000.
where SR= Standard Rate
AT = Total hours
AR = Actual rate
ST= Standard Time = 1500 units × 6 hours
= 9000 units.
(ii)Direct Labor Rate Variance = AT(SR- AR)
= 8000( 4-5)
= Rs.8000( favorable)
(iii) Direct Labor Idle Time Variance = IT × SR
=400 × 4
= Rs. 1600 ( unfavorable)
(iv)Direct Labor Efficiency Variance = SR(ST-AT)
=4(9000-7600)
= Rs.5600
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