Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 1

Performance reporting and flexible budgeting For the stamping department of a manufacturing firm, the standard cost for direct labor is $12 per hour, and the production standard calls for 2,000 stampings per hour. During February, 121 hours were required for actual production of 230,000 stampings. Actual direct labor cost for the stamping department for June was $1,573.
Required:
a. Complete the following performance report for February:

b. Analyze the budget variance by calculating the direct labor efficiency and rate variances for February.
c. What alternatives to the preceding monthly report could improve control over the stamping department's direct labor?