Question

JavaPro Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. JavaPro Systems has budgeted three hours of direct labor per​ connector, at a standard cost of $ 14 per hour. During​ August, technicians actually worked 198 hours completing 80 connectors. All 80 connectors actually produced were sold. JavaPro paid the technicians $ 14.80 per hour. What is JavaPro​'s direct labor cost variance for​ August?

Answer 1

Answer:

$429.60 Favorable

Explanation:

Provided information,

Standard Hours for each product = 3 hours

Standard Cost per hour = $14.00

Actual hours used = 198

Actual output = 80 connectors

Standard hours for actual output = 80 $\times$ 3 = 240 hours

Actual Rate = $14.80 per hour

Direct labor cost variance = Standard Cost - Actual Cost

Standard Cost = Standard hours $\times$ Standard Rae

= 240 $\times$ $14 = $3,360

Actual Cost = 198 $\times$ $14.80 = $2,930.40

Variance = $3,360 - $2,930.40 = $429.60

Since actual cost is less than standard variance is favorable.

$429.60 Favorable