EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

6. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
6. Before the labor variances can be computed, it is necessary to compute the actual direct labor cost for the month: Actual cost per backpack produced (part 2)... $ 31.35Number of backpacks produced... × 1,000Total actual cost of production... $31,350Less: Actual cost of materials ... $15,000 Actual cost of variable manufacturing overhead ... 3,600 18,600Actual cost of direct labor ... $12,750 With this information, the variances can be computed: Actual Hours of Standard Hours Allowed for Output, at Input, at the the Standard Rate at the Standard Rate Actual Rate Actual Hours of Input, (AH × AR) (AH × SR) (SH × SR)