Reference no: EM131817440

Question - Davenport Construction Associates compares actual results with a flexible budget. The standard direct labor rates used in the flexible budget are established each year at the time the annual plan is formulated and held constant for the entire year.

The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of remodeling work for September are shown in the following schedule:

Worker

Classification Standard

Direct Labor

Rate per Hour Standard Direct

Labor-Hours

Allowed for Output

I $ 29 510

II 21 510

III 16 510

The wage rates for each labor class increased under the terms of a new contract. The standard wage rates were not revised to reflect the new contract.

The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of September were as follows:

Worker

Classification Actual Direct

Labor Rate per Hour Actual Direct

Labor-Hours

I $ 28 590

II 23 700

III 26 390

Required:

(a) Calculate total direct labor variance.

(b) Calculate direct labor price and efficiency variances.

(c) Calculate Direct labor mix and yield variances.