Chapter 7 - Flexible Budgets, Direct-Cost Variances, and Management Control - Assignment Material - Problems - Page 282: 7-34(1)

Direct Manufacturing Labor Variances for July: Direct Manufacturing Labor Rate Variance: (Actual Rate - Budgeted Rate) $\times$ Actual Hours = (\$594,500 / 41,000 hours - \$14.30) $\times$ 41,000 hours = (\$14.50 - \$14.30) $\times$ 41,000 hours = \$8,200 U Direct Manufacturing Labor Efficiency Variance: (Budgeted Rate - Actual Rate) $\times$Actual Hours = (\$14.30 - \$14.50) $\times$ 41,000 hours = (\$0.20) $\times$ 41,000 hours = \$8,200 F

Direct Manufacturing Labor Variances for July: Direct Manufacturing Labor Rate Variance: (Actual Rate - Budgeted Rate) $\times$ Actual Hours = (\$594,500 / 41,000 hours - \$14.30) $\times$ 41,000 hours = (\$14.50 - \$14.30) $\times$ 41,000 hours = \$8,200 U Direct Manufacturing Labor Efficiency Variance: (Budgeted Rate - Actual Rate) $\times$ Actual Hours = (\$14.30 - \$14.50) $\times$ 41,000 hours = (\$0.20) $\times$ 41,000 hours = \$8,200 F