a. The following direct labor data pertain to the operations of Jacuzi Instrument Corporation. for the month of June: Actual labor rate Actual hours used Standard labor rate Standard hours allowed $18.50 per hr. 2,525 $18.25 per hr. 2,600 Instructions Prepare a matrix and calculate the labor variances. Price Variance Total Labor Variance Quantity Variance

Cornerstones of Cost Management (Cornerstones Series)
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Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 2CE: Warner Company has the following data for the past year: Warner uses the overhead control account to...
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a. The following direct labor data pertain to the operations of Jacuzi Instrument
Corporation. for the month of June:
Actual labor rate
Actual hours used
Standard labor rate
Standard hours allowed
$18.50 per hr.
2,525
$18.25 per hr.
2,600
Instructions
Prepare a matrix and calculate the labor variances.
Price Variance
Total
Labor Variance
Quantity Variance
b. Lawn Pros Yard Services, Inc. is trying to establish the standard labor cost of a
typical lawn that they cut for their customers each week. The following data have been
collected from time and motion studies over the last several months:
Actual time spent on cutting
.75 hour
Hourly wage rate
Payroll taxes
Equipment setup and downtime
Cleanup and rest periods
Fringe benefits
$20.00
7% of wage rate
10% of actual labor time
10% of actual labor time
20% of wage rate
Instructions
(a) Determine the standard direct labor hours per cutting
Determine the standard direct labor hourly rate.
(b)
(c) Determine the standard direct labor cost per setup and downtime
(d) If a a new customer's lawn took 1.25 hours to cut at the standard hourly rate, what
was the direct labor quantity variance?
Transcribed Image Text:a. The following direct labor data pertain to the operations of Jacuzi Instrument Corporation. for the month of June: Actual labor rate Actual hours used Standard labor rate Standard hours allowed $18.50 per hr. 2,525 $18.25 per hr. 2,600 Instructions Prepare a matrix and calculate the labor variances. Price Variance Total Labor Variance Quantity Variance b. Lawn Pros Yard Services, Inc. is trying to establish the standard labor cost of a typical lawn that they cut for their customers each week. The following data have been collected from time and motion studies over the last several months: Actual time spent on cutting .75 hour Hourly wage rate Payroll taxes Equipment setup and downtime Cleanup and rest periods Fringe benefits $20.00 7% of wage rate 10% of actual labor time 10% of actual labor time 20% of wage rate Instructions (a) Determine the standard direct labor hours per cutting Determine the standard direct labor hourly rate. (b) (c) Determine the standard direct labor cost per setup and downtime (d) If a a new customer's lawn took 1.25 hours to cut at the standard hourly rate, what was the direct labor quantity variance?
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