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EXERCISE 10 5 Working Backwards from Labor Variances LO2 The Worldwide Credit Card, Inc., uses standards to control the labor time involved in opening mail from card holders and recording the

EXERCISE 10–5 Working Backwards from Labor Variances [LO2]

The Worldwide Credit Card, Inc., uses standards to control the labor time involved in opening mail from card holders and recording the enclosed remittances. Incoming mail is gathered into batches, and a standard time is set for opening and recording each batch. The labor standards relating to one batch are as follows:

 

 

The record showing the time spent last week in opening batches of mail has been misplaced. However, the batch supervisor recalls that 168 batches were received and opened during the week, and the controller recalls the following variance data relating to these batches:

 

Text Box: Total labor spending variance . . . . . . .	$330 U Labor rate variance . . . . . . . . . . . . . . .	$150 F

 

Required:

1.       Determine the number of actual labor-hours spent opening batches during the week.

2.       Determine the actual hourly rate paid to employees for opening batches last week.

(Hint: A useful way to proceed would be to work from known to unknown data either by using the variance formulas or by using the columnar format shown in Exhibit 10–6.)

Jun 28 2020 View more View Less

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