The two components of the direct labour flexible budget variance are the direct labour price variance and the direct labour quantity variance.
<h3>What is direct labour flexible budget?</h3>
To determine how many work hours will be required to create the items listed in the production budget, the direct labour budget is used. The overall number of hours required will be determined by a more intricate direct labour budget, which will also divide this data down by labour type.
Direct labour price variance - The cost of the discrepancy between the expected and actual labour rates is measured by direct labour rate variance. The variance will be deemed unfavourable if it shows that actual labour rates were higher than anticipated labour rates.
Direct labour quantity variance - The cost of the discrepancy between the anticipated number of labour hours needed for the operations and the actual number of labour hours needed for the operations is known as the direct labour efficiency variance.
The labour quantity variance is calculated as-
- The labour price variation is calculated by multiplying the actual hours worked by the actual paid rate, which is then subtracted from the standard budgeted rate.
- The standard rate is multiplied by the difference between the standard hours budgeted and the actual worked hours budgeted to determine the labour quantity variance.
To know more about the flexible-budget variance measures, here
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Your firm, your boss’s clients, and shareholders
Answer:
Emily has a basis of $60,000 in the shares of Red Corporation.
Explanation:
Emily's basis for Red Corporation's stock = real estate ($40,000) + service ($20,000) = $60,000
Sarah's basis for Red Corporation's stock = computers ($80,000) = $80,000
Even though both Emily and Sarah received 600 shares each, the basis for her tax calculations are different.
Answer: Explicit Costs
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