Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows:
$$\begin{array} { l l }
\text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \
\text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour }
\end{array}$$
During the first quarter, Faas produced 5,000 units of this product.
- At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 hours of direct labor time and actual direct labor costs were $184,800.
Using the format below, please prepare an analysis of the direct labor cost variances.

Question

Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows:
$$\begin{array} { l l } 
\text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \
\text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour }
\end{array}$$
During the first quarter, Faas produced 5,000 units of this product.
-  At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 hours of direct labor time and actual direct labor costs were $184,800.
Using the format below, please prepare an analysis of the direct labor cost variances.

Quizplus · Accepted Answer

The Answer of Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows:
$$\begin{array} { l l } 
\text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \
\text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour }
\end{array}$$
During the first quarter, Faas produced 5,000 units of this product.
-  At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 hours of direct labor time and actual direct labor costs were $184,800.
Using the format below, please prepare an analysis of the direct labor cost variances.

Faas Marine Stores Company Manufactures Decorative Fittings for Luxury Yachts