COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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(Actual rate-Standard hours) X Actual hours
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(Actual hours-Standard hours) X Standard price
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(Actual hours-Standard rate) X Actual hours
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(Actual rate-Standard rate) x Acutal hours worked hours
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Detailed explanation-1: -Labor variance focuses specifically on working rates given the actual amount of hours worked and is calculated with the following formula: (Actual Hours x Actual Rate)-(Actual Hours x Standard Rate).
Detailed explanation-2: -Labour Rate Variance (LRV) It is the difference between the standard and the actual direct Labour Rate per hour for the total hours worked.
Detailed explanation-3: -The difference between standard and actual rate multiplied by actual hours. Labor rate variance is calculated to determine the difference between the actual rate and standard rate, which is multiplied by the actual hours. It is a favorable variance when actual rate is less than the standard rate.
Detailed explanation-4: -Calculate the direct labor hours The figure is obtained by dividing the total number of finished products by the total number of direct labor hours needed to produce them. For example, if it takes 100 hours to produce 1, 000 items, 1 hour is needed to produce 10 products and 0.1 hours to produce 1 unit.