Direct labor variances la barte company manufactures commuter bicycles from recycled materials. the following data for july of the current year are available: quantity of direct labor used 5,050 hrs. actual rate for direct labor $16.80 per hr. bicycles completed in july 1,000 bicycles standard direct labor per bicycle 5.4 hrs. standard rate for direct labor $16.00 per hr. a. determine 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.

Explanation:

a. The computation of the labor rate variance is shown below:  

= Actual Hours × (Actual rate - standard rate)  

= 5,050 × ($16.80 per hour - $16 per hour)  

= 5,050 × $0.80 per hour

= $4,040 unfavorable

b. The computation of the labor time variance is shown below:  

= Standard Rate × (Actual hours - Standard hours)  

= $16 per hour × (5,050 hours - 1,000 × 5.4 hours)  

= $16 per hour × -350 hours

= -$5,600 favorable

c. The computation of the total labor variance is shown below:  

= (Actual hours × Actual rate) - (Standard hours × standard rate)

= (5,050 hours × $16.80 per hour) - (1,000 bicycles × 5.4 hours × $16 per hour)

= $84,840 - $86,400

= -$1,560 favorable

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total