Answer:
Labor Efficiency Variance=268 Unfavorable
Labor Rate Variance= $ 150 Favorable
Total Direct Labor Cost Variance= $ 118
Work In Process $ 6432 debit
Explanation:
Glacier Bicycle Company
Quantity of direct labor used 500 hrs.
Actual rate for direct labor $13.10 per hr.
Standard direct labor per bicycle 2 hrs.
Standard rate for direct labor $13.40 per hr
The labor efficiency variance= (Standard Hours allowed * standard labor Rate )- ( Actual Hours * standard labor Rate )
Labor Efficiency Variance= (SH* SR)- (AH*SR)
Labor Efficiency Variance= ( 2* 240 *13.4) - (500* 13.4)
Labor Efficiency Variance= ( 480*13.4) - (500* 13.4)
Labor Efficiency Variance= $ 6432- $ 6700= 268 Unfavorable
Labor Rate Variance= (actual hours * actual rate) - (actual hours* standard rate)
Labor Rate Variance= ( 500 *13.1) - (500*13.4)= 6550-6700= $ 150 Favorable
Total Direct Labor Cost Variance= Labor Efficiency Variance + Labor Rate Variance
Total Direct Labor Cost Variance= 268 Unfavorable +$ 150 Favorable
Total Direct Labor Cost Variance= $ 118
Work In Process $ 6432 debit
Labor Efficiency Variance 268 Unfavorable debit
Labor Rate Variance$ 150 Favorable credit
Accrued Payroll $ 6550 credit
