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The davidson corporation produces clock. According to company standards, it should take 2 hours of direct labor to produce a clock. Davidson standard labor cost is 19 per hour. During june thomas produced 6200 clocks and used 13500 hours of direct labor at a total of 260000. What is thomas direct labor rate variance for june?

Respuesta :

Answer:

$3,500 Unfavorable

Explanation:

Direct Labor Rate Variance = (Standard Rate - Actual Rate) [tex]\times[/tex] Actual Hours

Provided information, we have

Standard hours per unit = 2

Standard hours for actual output = 2 [tex]\times[/tex] 6,200 = 12,400 hours

Standard rate = $19 per hour

Actual rate = $260,000/13,500 = $19.259

Standard Rate [tex]\times[/tex] Actual Hours

= $19 [tex]\times[/tex] 13,500 = $256,500

Actual Cost = $260,000

Variance = $256,500 - $260,000 = - $3,500 Unfavorable

Since value is negative as actual labor cost is more than standard cost for actual hours, the variance is unfavorable.

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