13RQ - Horngren'S Financial And Managerial Accounting

Question

Question: List the direct labor variances, and briefly describe each.

Step-by-Step Solution

Answer

Answer

The direct material variances can be in form of direct labor cost variance and direct labor efficiency variance

Step 1 Definition of direct labor

Direct labor is defined as the cost incurred by the company on the labor which directly associated with the production process of the business.

 

Step 2 Direct labor variances

The direct labor variances are as follows:

1. Direct labor Cost variance: The variances of direct labor cost keep in check that the direct labor cost per hour within the standards set by the management of the company 

 

1. Direct Labor Efficiency Variance: The direct labor efficiency variance shows the ability of the business to keep the actual usage of direct labor within the standards