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Problem - Direct labor variances - Ada Clothes Company produced 40,000 units during April. The Cutting Department used 12,800 direct labor hours at an actual rate of $16.50 per hour. The Sewing Department used 19,600 direct labor hours at an actual rate of $19.25 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $18.00. The standard labor time for the Cutting and Sewing departments is 0.3 hour and 0.5 hour per unit, respectively.
Required -
a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department.
b. Interpret your results.
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