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Japan Company produces lamps that require 2 standard hours per unit at a standard hourly rate of $18.40 per hour. Production of 7,100 units required 14,630 hours at an hourly rate of $18.00 per hour.

What is the direct labor:

(a) Rate variance
(b) Time variance
(c) Total cost variance

Enter favorable variances as negative numbers.

Answer :

Final answer:

The direct labor (a) rate variance is -$5,852, (b) time variance is $7,924, and (c) total cost variance is $2,072.

Explanation:

To calculate the direct labor variances, we need to use the following formulas:

Rate Variance: (Actual Rate - Standard Rate) x Actual Hours

Time Variance: (Actual Hours - Standard Hours) x Standard Rate

Total Cost Variance: Rate Variance + Time Variance

Let's calculate each variance:

Rate Variance:

Standard Rate = $18.40 per hour

Actual Rate = $18.00 per hour

Actual Hours = 14,630 hours

Rate Variance = ($18.00 - $18.40) x 14,630 = -$5,852

Time Variance:

Standard Hours per Unit = 2 hours

Actual Units Produced = 7,100 units

Standard Hours Allowed = Standard Hours per Unit x Actual Units Produced = 2 x 7,100 = 14,200 hours

Actual Hours = 14,630 hours

Time Variance = (14,630 - 14,200) x $18.40 = $7,924

Total Cost Variance:

Total Cost Variance = Rate Variance + Time Variance = -$5,852 + $7,924 = $2,072

Learn more about calculating labor variances here:

https://brainly.com/question/31605844

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