Bear Company
Bear Company uses a standard costing system. The following information pertains to direct labour costs for the month of March: $$\begin{array} { l l }
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { fav ourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$$
-Refer to Bear Company. What is the total labour budget variance?

Question

Bear Company
Bear Company uses a standard costing system. The following information pertains to direct labour costs for the month of March: $$\begin{array} { l l } 
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { fav ourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$$
-Refer to Bear Company. What is the total labour budget variance?

Quizplus · Accepted Answer

The total labour budget variance is the difference between the actual direct labour costs and the standard direct labour costs. The actual direct labour costs are $13.50 per hour x 10,000 hours = $135,000. The standard direct labour costs are $15.00 per hour x 10,000 hours = $150,000. Therefore, the total labour budget variance is $150,000 - $135,000 = $15,000 favourable.

Bear Company Bear Company Uses a Standard Costing System -Refer to Bear Company

Bear Company
Bear Company Uses a Standard Costing System -Refer to Bear Company