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Q7SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 1307

Short Answer

Martin, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.5 hours per glass, at a cost of $18 per hour. The actual results for one month’s production of 6,500 glasses were 0.2 hours per glass, at a cost of $11 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance.

The direct labor cost variance of the company is $63,700(F)

The direct labor efficiency variance of the company is $35,100(F).

See the step by step solution

Step by Step Solution

Step 1: Meaning of Variances

Cost variances refer to the difference between the actual cost incurred and the budgeted costs.

Step 2: Computation of the direct labor cost variance-

Step 3: Computation of the direct labor efficiency variance-

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