12 Use the following data to find the direct labor cost vari

12. Use the following data to find the direct labor cost variance. $7/hr.) $28 per unit Direct labor standard (4 hrs. Actual hours worked per unit Actual units produced Actual rate per hour 3.5 hours 3,500 units $7.50 A. $6,125 unfavorable. B. $7,000 unfavorable. $7,000 favorable. 12,250 favorable. ,86,125 favorable.

Solution

Since two unrelated questions are posted, the first appearing question is answered below;

1. Direct labour cost variance = (standard time* standard rate) - (actual time* actual rate)

here,

Standard time = standard time per unit * number of units produced

=> 4hrs * 3,500 units =>14,000 hours.

Standard rate = $7 per hour

Actual time = actual hours per unit * number of units

=>3.5 hours * 3,500

=>12,250 hours.

Actual rate =$7.50

Direct labour cost variance = (14,000*$7) - (12,250*$7.5)

=>$98,000 - $91,875.

=>$6,125 favourable...(since actual cost is less than standard, we have favourable balance).