The director of cost management for Portland Instrument Corporation compares each month's actual results with a monthly plan. The standard direct-labor rates for the year just ended and the standard hours allowed, given the actual output in April, are shown in the following schedule. Standard Direct Labor Rate per Standard Direct-Labor Hours Allowed, Given April Output Labor class III Labor class II Labor class I $24.78 21.79 15.70 A new union contract negotiated in March resulted in actual wage rates that differed from the standard rates. The actual direct-labor hours worked and the actual direct-labor rates per hour experienced for the month of April were as follows: Actual Direct Labor Rate per Actual Direct Labor Hours Labor class III Labor class II Required: 1-a.
Compute the direct labor rate variance for each labor class for the month of Apri 1-b. Compute the direct-labor efficiency variance for each labor class for the month of April. 2. Which of the following could be considered an advantage of using a standard-costing system in which the standard direct-labor rates are not changed during the year to reflect such events as a new labor contract? Complete this question by entering your answers in the tabs below. Reg 1A Reg 15 Reg 2 Compute the direct labor rate variance for each labor class for the month of April. (Indicate the effect of each variance by selecting “Favorable” or “Unfavorable”. Select “None” and enter “0” for no effect i.e., zero variance).) Labor Clase Total.
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