EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

2, - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
2,800 hours × $6.00 per hour* $6.00 per hour* 3,000 hours** × $18,200 = $16,800 = $18,000 ↑ ↑ ↑Rate Variance, $1,400 U Efficiency Variance, $1,200 F Total Variance, $200 U * 2,850 standard hours ÷ 1,900 sets = 1.5 standard hours per set, $9.00 standard cost per set ÷ 1.5 standard hours per set = $6.00 standard rate per hour. ** 2,000 sets × 1.5 standard hours per set = 3,000 standard hours. Alternative Solution: Labor rate variance = AH (AR – SR)