Ada Clothes Company produced 15,000 units during April. The Cutting Department used 2,900 direct labor...
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Accounting
Ada Clothes Company produced 15,000 units during April. The Cutting Department used 2,900 direct labor hours at an actual rate of $11.60 per hour. The Sewing Department used 4,800 direct labor hours at an actual rate of $11.30 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $11.50. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively. a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. D D Tc b. The two departments have opposite results. The Cutting Department has a(n) rate variance and a(n) time variance, resulting in a total cost variance. In contrast, the Sewing Department has a(n) rate variance but has a(n) time variance, resulting in a total cost variance. Feedback Check My Work a. Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The labor cost variance is the difference between the actual and standard labor cost. b. Consider factors affecting labor performance
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