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JavaPro Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. JavaPro Systems has budgeted three hours of direct labor per​ connector, at a standard cost of $ 14 per hour. During​ August, technicians actually worked 198 hours completing 80 connectors. All 80 connectors actually produced were sold. JavaPro paid the technicians $ 14.80 per hour. What is JavaPro​'s direct labor cost variance for​ August?

Respuesta :

Answer:

$429.60 Favorable

Explanation:

Provided information,

Standard Hours for each product = 3 hours

Standard Cost per hour = $14.00

Actual hours used = 198

Actual output = 80 connectors

Standard hours for actual output = 80 [tex]\times[/tex] 3 = 240 hours

Actual Rate = $14.80 per hour

Direct labor cost variance = Standard Cost - Actual Cost

Standard Cost = Standard hours [tex]\times[/tex] Standard Rae

= 240 [tex]\times[/tex] $14 = $3,360

Actual Cost = 198 [tex]\times[/tex] $14.80 = $2,930.40

Variance = $3,360 - $2,930.40 = $429.60

Since actual cost is less than standard variance is favorable.

$429.60 Favorable

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