Question

TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product. Standard Standard Standard Quantity Price Cost Direct Materials 8 pounds $ 1.80 per pound $ 14.40 Direct Labor 0.25 hour $ 8.00 per hour 2.00 $ 16.40 During November, TaskMaster purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours. What is the direct labor rate variance for November

Answer 1

Answer:

The direct labor rate variance for November is $34,200

Explanation:

To find out the direct labor rate variance, we have to multiply the actual standard rate of direct labor into actual hours of direct labor used

Standard hourly rate of direct labor hour = $14.40

Actual direct labor hours = 5,000

Standard direct labor cost

= 5,000 × $14.40

= $72,000

Total factory wages are $42,000 in which direct labor is 90%

= $42,000 × 90%

= $37,800

Actual direct labor cost = $37,800

Therefore,

Direct labor rate variance = Standard direct labor cost - Actual direct labor cost

Direct labor rate variance

= $72,000 - $37,800

= $34,200