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# Standard Cost Direct Labor Variances: Binding Department

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Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher:

Original Budget Flexed Budget Actual Budget Variance
Direct labor \$10,290 \$11,000

The original budget is based on the expectation that 6,370 books would be bound; the standard is 13 books
per hour at a pay rate of \$21 per hour. During the week, 6,890 books were actually bound. Employees
worked 500 hours at an actual total cost of \$11,000.

a. Calculate the flexed budget amount against which actual performance should be evaluated and then
calculate the budget variance. (Input all amounts as positive values. Indicate the effect of each variance
by selecting "F" for favorable, "U" for unfavorable.)

b. Calculate the direct labor efficiency variance in terms of hours.
(Input the answer as positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)

c. Calculate the direct labor rate variance.
(Input the amount as positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)