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Variance analysis.

See attachment for full problem details.

The following direct labor standards have been established for product N30A:

Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
c. Prepare a journal entry to record direct labor costs during the month, including the direct labor variances.

Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). The denominator activity level is 60,000 direct labor-hours, or 300,000 units.

Required:

a. Compute the variable manufacturing overhead spending and efficiency variances.
b. Compute the fixed manufacturing overhead budget and volume variances.

Attachments

Solution Summary

Excel file shows calculations of labor rate variance , labor efficiency variance, journal entry to record direct labor costs during the month, including the direct labor variances,variable manufacturing overhead spending and efficiency variances and fixed manufacturing overhead budget and volume variances.

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