[j3cpa]

Can someone help me with this question?

The standard direct labor cost to produce one pound of output for a company is presented below. Related data regarding the planned and actual production activities for the current month for the company are also given below.

DLH = Direct Labor Hours

Direct Labor Standard:

0.4 DLH @ $12.00 per DLH = $4.80

Planned production

15,000 pounds

Actual production

15,500 pounds

Actual direct labor costs (6,250 DLH)

$75,250

The answer is $600 unfavorable. The formula to solve this would be the difference between Actual Hour and Standard Hours x Standard Rate. I get that the standard rate is $12/hour. The actual hour is given as 6250. How come the Standard hours arn’t 6000? 15,000 pounds planned x .4 = should be 6000.

I did it. You can too!

Study Material:
GLEIM
BEC - FEB/2012
AUD - FEB/2012
FAR - JULY/2012
REG - JULY/2012

[Anonymous]

For standard hours you have to take your Actual Hours X Standard rate. This is your standard allowed for actual production. What review materials do you use? I used Roger and he was very good at explaining these variances.

[Bourne]

Same question: https://www.another71.com/cpa-exam-forum/topic/need-explanation-please/

AUD- 82
REG- 86
FAR- 86
BEC- 88

[j3cpa]

Thank you Bourne & CPA Champ.

I reviewed the other post and for those that read this and is confused by my question.

the formula calls for SR (Actual hours – Standard hours per ACTUAL output). I was assuming it was standard hours per planned output as that what made sense to me….

I did it. You can too!

Study Material:
GLEIM
BEC - FEB/2012
AUD - FEB/2012
FAR - JULY/2012
REG - JULY/2012

[FJW92]

I believe its .04 and not .4

FAR 69 70

AUD 79

REG TBA

BEC TBA

[Author]

Replies