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Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses...

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Accounting

Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows:

Standard Hours Standard Rate per Hour Standard Cost
12 minutes (0.20 hours) $10.00 $2.00

During July, 2,150 hours of direct labour time were recorded to make 10,000 units. The direct labour cost totalled $21,070 for the month.

Required:

1-a. What direct labour cost should have been incurred to make the 10,000 speakers? (Do not round intermediate calculations.)

1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

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