Problem:
During March 2012, McGuire Tool & Die Company worked on four jobs. A review of direct labour costs reveals the following summary data.
|
Actual
|
Standard
|
|
|
Job
Number
|
Hours
|
Costs
|
Hours
|
Costs
|
Total
Variance
|
|
A257
|
220
|
$4,400
|
225
|
$4,500
|
$ 100 F
|
|
A258
|
450
|
9,900
|
430
|
8,600
|
1,300 U
|
|
A259
|
300
|
6,150
|
300
|
6,000
|
150 U
|
|
A260
|
115
|
2,070
|
110
|
2,200
|
130 F
|
|
Total variance
|
|
|
|
|
$1,220 U
|
Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.
Instructions
Prepare a report for the plant supervisor on direct labour cost variances for March. The report should have columns for
(1) Job No.,
(2) Actual Hours,
(3) Standard Hours,
(4) Quantity Variance,
(5) Actual Rate,
(6) Standard Rate,
(7) Price Variance, and
(8) Explanation.