COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If:the standard direct labor rate was RM10 per hour;the direct labor rate variance amounted to RM450 favorable; andthe actual direct labor cost amounted to RM39, 550.The actual direct labor hours worked were:
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3, 955 hours
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4, 500 hours
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3, 910 hours
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4, 000 hours
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Explanation:
Detailed explanation-1: -The formula for this variance is:(standard hours allowed for production – actual hours taken) × standard rate per direct labour hour.
Detailed explanation-2: -The direct labor rate variance compares the actual rate per hour of direct labor to the standard rate per hour of labor for the hours worked.
Detailed explanation-3: -A direct labor rate is calculated simply by dividing the estimated total labor cost by the total direct labor hours.
Detailed explanation-4: -It is calculated as: (Expected direct labour hours of actual output ÷ actual direct labour hours worked) × 100%.
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