Direct Labor Variances Glacier Bicycle Company manufactures commuter bicycles from recycled materials. The following data for October are available: Quantity of direct labor used 5,000 hrs. Actual rate for direct labor $22.75 per hr. Bicycles completed in October 800 bicycles Standard direct labor per bicycle 6.0 hrs. Standard rate for direct labor $24.00 per hr. a. Determine for October the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

ii. Direct labor time variance = Standard rate for direct labor * (Quantity of direct labor used - Bicycles completed in October * Standard direct labor per bicycle)

= 24 * (5000 - 800 * 6)

= 4,800 (Unfavorable)

iii. Total Direct labor cost variance = (Quantity of direct labor used * Actual rate for direct labor) - (Bicycles completed in October * Standard direct labor per bicycle * Standard rate for direct labor)

= (5000 * 22.75) - (800 * 6 * 24)

= -1450 (Favorable)

SerenaBochenek SerenaBochenek · Answer 2 · 2020-08-11T04:44:42+02:00

Answer:

The total cost variance of labor will be "-1,450 (favorable)". The further explanation is given below.

Explanation:

According the question,

Direct labor rate variance will be:

⇒ [tex]5000\times (22.75-24)[/tex]

⇒ [tex]5000\times (-1.25)[/tex]

⇒ [tex]-6,250 \ (favorable)[/tex]

Direct labor time variance will be:

⇒ [tex]24\times (5000-800\times 6)[/tex]

⇒ [tex]24\times 200[/tex]

⇒ [tex]4,800 \ (unfavorable)[/tex]

Now,

The Total Direct labor cost variance will be:

⇒ [tex](5000\times 22.75)-(800\times 6\times 24)[/tex]

⇒ [tex](113,750)-(115,200)[/tex]

⇒ [tex]-1,450 \ (favorable)[/tex]