Question

standard cost of product is
time : 6 hours per unit
rate : Rs 4 per hours
actual cost :
production 1,500 units
Hours taken 7,600 units
Idle time (in hours) 400
Total hours 8,000
total labour cost announced to Rs 40,000 . calculate Labour variance​

Answer 1

Answer:

Step-by-step explanation:

(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