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## Direct Labor Rate Variance Formula, Example

Is the difference between the actual number of direct labor hours worked and budgeted direct labor hours that should have been worked based on the standards. The difference between the actual number of direct labor hours worked and budgeted direct labor hours that should have been worked based on the standards. The difference between actual costs for direct labor and budgeted costs based on the standards. Primarily, it reviews the differences between the expected costs of labor and the actual costs of labor. It can also aid the planning and development of new budgets and serve as a means of gaining information on company performance. This information can be used to set new hourly rates for employees.

• A labor variance is a type of cost variance that focuses on labor rates and hours.
• Using the standard and actual data given for Lastlock and the direct materials variance template, compute the direct materials variances.
• The 21,000 standard hours are the hours allowed given actual production.
• Alan Anderson, PhD is a teacher of finance, economics, statistics, and math at Fordham and Fairfield universities as well as at Manhattanville and Purchase colleges.
• In this illustration, AH is the actual hours worked, AR is the actual labor rate per hour, SR is the standard labor rate per hour, and SH is the standard hours for the output achieved.
• When actual costs are less than the standard cost, a cost variance is favorable.

This is a favorable outcome because the actual rate of pay was less than the standard rate of pay. The labor efficiency variance calculation presented previously shows that 18,900 in actual hours worked is lower than the 21,000 budgeted hours. Clearly, this is favorable since the actual hours worked was lower than the expected hours.

## 7 Direct Labor Variances

To compute the direct labor price variance, subtract the actual hours of direct labor at standard rate (\$43,200) from the actual cost of direct labor (\$46,800) to get a \$3,600 unfavorable variance. This result means the company incurs an additional \$3,600 in expense by paying its employees an average of \$13 per hour rather than \$12. In this case, the actual hours worked per box are 0.20, the standard hours per box are 0.10, and the standard rate per hour is \$8.00. This is an unfavorable outcome because the actual hours worked were more than the standard hours expected per box.

The figure is obtained by dividing the total number of finished products by the total number of direct labor hours needed to produce them. For example, if it takes 100 hours to produce 1,000 items, 1 hour is needed to produce 10 products and 0.1 hours to produce 1 unit. The human resources manager of Hodgson Industrial Design estimates that the average labor rate for the coming year for Hodgson’s production staff will be \$25/hour. This estimate is based on a standard mix of personnel at different pay rates, as well as a reasonable proportion of overtime hours worked. If the cost of labor includes benefits, and the cost of benefits has changed, then this impacts the variance.

## Standard Rate per Hour

The answer in this section will show how the change in rate had an effect on the actual spending compared to the planned budget. A labor variance is a type of cost variance that focuses on labor rates and hours. The comparison that is used to compute the formula to compute the direct labor rate variance is to calculate the difference between a labor variance compares standard versus actual rates and hours for workers, typically on a specific project. These computations are important because they help managers to analyze differences between planned and actual costs related to labor.

Such variance amounts are generally reported as decreases or increases in income, with the standard cost going to the Work in Process Inventory account. Using the 3 values from steps 1-3, calculate the labor rate variance using the formula or calculate above. The following formula is used to calculate https://accounting-services.net/ the labor rate variance. Manufacturing costs are the costs involved in producing a product, including the costs of materials, direct labor, and overheads. Now that you understand the importance of calculating labor costs, you’re probably wondering how do you calculate them in manufacturing.

This information can be used to perform fixed overhead cost variance analysis. A favorable labor rate variance suggests cost efficient employment of direct labor by the organization. Standards are cost targets that can be used to make financial projections or to measure performance. The cost formulas used for budgeting are considered standards. These standards set forth the expected revenue or cost for a particular item. For example, if the cost formula for supplies is \$10 per unit (\$10Q), this is also the standard cost for supplies.

### Absorption Costing Explained, With Pros and Cons and Example – Investopedia

Absorption Costing Explained, With Pros and Cons and Example.

Posted: Tue, 20 Dec 2022 08:00:00 GMT [source]

Patty invented a virtually indestructible bicycle lock called Lastlock. The lock is lightweight, retractable, and fits easily in a jacket pocket.

## Direct Labor: Standard Cost, Rate Variance, Efficiency Variance

Or, one can perform the algebraic calculations for the price and quantity variances. Note that unfavorable variances offset favorable variances. A total variance could be zero, resulting from favorable pricing that was wiped out by waste. A good manager would want to take corrective action, but would be unaware of the problem based on an overall budget versus actual comparison.

Indirect labor contributes to your company’s overhead, but these costs aren’t attributed to a particular product or service because the roles relate to the entire business. Indirect costs also include rent, insurance, depreciation, and quality control. Overtime, sick pay, maternity pay, and training costs all contribute, so your total labor cost will be much more than just employees’ basic salaries.

There may be wrong estimations taken by the management about the labor rate. They may sets very high rates as compared to actual labor rates. It will give you favorable variance, at the end when you compare the two. If your employees are efficient, they’ll create more products during their working hours, so you’ll be getting more bang for your buck with your labor costs. This will reduce the ratio of labor cost to the revenue generated by the products. If an employee uses raw materials or tools to develop your business’s product or service, their salary is a direct labor cost example. Total labor variance (11,100 U + 2,000 U)\$ 13,100 UnfavorableSince both the rate and efficiency variances are unfavorable, we would add them together to get the TOTAL labor variance.

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## Free Contractor Invoice Template Template for PDF Excel

It can be hard to format and edit invoices in Word, Google Docs, and Excel. Save yourself the hassle and make a clean, downloadable and printable invoice in a few clicks with our independent contractor invoice generator. Service InvoiceThis Service Invoice Template consists of information such as the company’s name, address, telephone number, customer’s name, description of service, fees and many more. The information on this template is just standard details you can see in an invoice. Feel free to add more or remove some that are not necessary. When you download the above templates, make sure that you customize them in a way that will make your client pay you faster.

### Best Invoicing and Estimate Apps for iPhone and iPad – Startup.info

Best Invoicing and Estimate Apps for iPhone and iPad.

Posted: Tue, 15 Nov 2022 08:00:00 GMT [source]

Other than that, if the corporation is a business partner, it is not subject to tax withholding and may or may not be filled out on the invoice. However, withholding fees, etc., are subject to withholding obligations to business partners.

## Popular Forms

The template support all working conditions such as hourly rate, salary, ..etc as well as the option of partial and full payments. For customer requirements, we usually suggest not oversharing on an invoice, meaning not to include too many small details unless it’s expected in your industry.

• Download the general labor invoice template to request payment for many types of labor, including construction, plumbing, maintenance, and related work.
• Invoices are used by a person or company to tell a buyer that payment is now due.
• Let your customers know exactly what you will be doing, and how much it will cost, by sending them a proforma invoice before you start work with your agreed-upon terms and expectations.
• Customize this template by adding your own logo, and use it for construction-related invoices for job estimation, contractor, subcontractor, and contractor progress billing.

The ‚invoice#‘ field should be filled with a unique number – it is generally called invoice number but usually you can add prefix text to it, such as ‚INV‘. If you use Invoice Manager, Free General Labor Invoice Template the invoicing program will help you generate unique invoice numbers automatically. The service invoice template supports all freelancer-based work types such as hourly, and per piece.

## General Laborer Skills

Payments Get your accounts credited faster with online payments. Nearside is a financial technology company and is not a bank. A quote describes what the finished https://www.wave-accounting.net/ work will look like and how much it’ll cost to complete. Quotes set the expectations for the client, and you don’t move forward until they sign off on it.

• This Free Consultant Invoice Template uses the Form Calculation widget that displays the subtotal, tax, and total amount of the services fee.
• In case you spot any material omissions or errors, be sure to contact the client immediately and correct it.
• Each line’s total, subtotal and total due is calculated automatically from the data entered.
• Actual roofing installation may be billed as a fixed cost, or as hourly labor.
• The first is a Name column, where you can enter your employee’s name.

For example, unless customers ask for price per unit to be included, you’ll likely save yourself time and hassle by using a template that just includes an item total. If taxes are included, you’ll also want to make sure you use a template that includes taxes. Having a master template with this information will save you the time of having to add back in your own company information and logo each time you create a new invoice. Simply choose your industry from the list below, select your preferred file format, and download a blank invoice template you can customize.

## Excel Invoice Template

Download these free invoice templates to customize and use for your small business. Instead of waiting until the end of the month to invoice all your clients at once, it’s great to have a ready-made invoice template that you can fill and send right after each job is done.

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## The Four Major Types Of Investment Bonds

Remember, when interest rates are falling, bond prices rise. Because of this, callable bonds are not as valuable as bonds that aren’t callable with the same maturity, credit rating, and coupon rate. The payments on a bond come in two major types – fixed rate and floating rate. On a fixed-rate bond, the issuer agrees to pay a specified amount of interest, and that’s all an investor can expect to receive. On floating rate bonds, which are less common, the payment adjusts higher or lower in accord with the prevailing interest rate.

Unlike stocks, bonds can vary significantly based on the terms of its indenture, a legal document outlining the characteristics of the bond. Because each bond issue is different, it is important to understand the precise terms before investing. In particular, there are six important features to look for when considering a bond. While bonds are relatively low risk, they do have some weak spots, especially if inflation and interest rates move higher.

## Bonds As Investments

So if the bond issuer defaults, the asset is then transferred to the investor. A mortgage-backed security is one type of secured bond backed by titles to the homes of the borrowers. Adding bonds can create a more balanced portfolio by adding diversification and calming volatility. But the bond market may seem unfamiliar even to the most experienced investors. Many investors make only passing ventures into bonds because they are confused by the apparent complexity of the market and the terminology. Get your start in bond investing by learning these basic bond market terms. Investment-grade bonds are issued by companies that have earned a credit rating of at least triple-B from the credit-rating agencies.

The current yield can be used to compare the interest income provided by a bond to the dividend income provided by a stock. This is calculated by dividing the bond’s annual coupon by the bond’s current price.

## 4 1 Yield To Call Ytc

Price risk refers to the fact that bond prices change when market interest rates change. Reinvestment risk refers to the fact that when bond coupons are received they are reinvested at the prevailing market interest rate when they are received.

If this happens, the bond holder’s interest payments cease and they receive their principal early. If the bond holder then reinvests the principal in bonds with similar characteristics , they will likely have to accept a lower coupon rate, one that is more consistent with prevailing interest rates.

The income component is a key reason investors own bonds in their portfolio. Bonds tend to be less volatile than stocks, and are typically recommended to make up at least some portion of a diversified portfolio.

When it comes to bond investing, there’s a lot more to know than the current interest rate on Treasuries. For practical purposes, however, duration represents the price change in a bond given a 1% change in interest rates. We call this second, more practical definition the modified duration of a bond. Convertible bonds are debt instruments with an embedded option that allows bondholders to convert their debt into stock at some point, depending on certain conditions like the share price. Bonds have maturity dates at which point the principal amount must be paid back in full or risk default. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Investopedia does not include all offers available in the marketplace.

## Key Things To Know About Bonds

Asset-backed securities are bonds whose interest and principal payments are backed by underlying cash flows from other assets. Examples of asset-backed securities are mortgage-backed securities , collateralized mortgage obligations , and collateralized debt obligations . Bonds provide the borrower with external funds to finance long-term investments or , in the case of government bonds, to finance current expenditure. Let’s say you buy a \$5,000, 6-year corporate bond paying a rate of 5% per year, semi-annually directly from a brokerage. Assuming you hold the bond through its maturity date, you will get 12 payments of \$125 each, or a total of \$1,500. If you want to sell, you can sell it back to the original brokerage at any time at market value.

The amount of liability coverage on other policies shall be commensurate with any legal requirements of the locality and sufficient to meet normal and customary claims. Property damage liability insurance shall be required only in special circumstances as determined by the agency.

Financial leverage – when finance a bond and the bond earns you a return on equity it is financial leverage. If a company invests the proceeds from the bond at a higher interest rate than the interest payments on the bond, then the company will make money on issuing the bond. For example – a 10% coupon rate, a \$1000 bond is issued, and the price goes down to \$800. The yield will go up to 12.5% this is since you are guaranteed \$100 on an asset that is now worth \$800. If the company issues the 6% convertible bonds the company will pay lower interest rates at the start of the project which could be beneficial.

## Risk

All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s https://accountingcoaching.online/ Terms and Conditions. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.

Savings bonds function differently from standard Treasuries, and they do not pay out the accumulated interest until you redeem the bond. Here’s a look at how bonds work 4 Basic Things to Know About Bonds and the different types of bonds that are available. We’ll also go over some useful bond-buying strategies and discuss the pros and cons of investing in bonds.

Bond funds typically hire credit analysts to evaluate a bond’s credit quality, helping to limit investor risk substantially. Certain bond funds can help provide positive returns regardless of whether rates are rising, falling or flat.

• They are provided for general information only and are not intended to be a substitute for a consultation with a financial professional.
• Treat questions regarding the authenticity and enforceability of the power of attorney at the time of bid opening as a matter of responsibility.
• If the numbers were reversed and Bond B had a lower interest rate than Bond A, Bond A might be trading at a premium to its face value.
• Ratings agencies such as Fitch Ratings, A. M. Best, Moody’s, and Standard & Poor’s (S&P) are hired by large borrowers to analyze the company and rate its debt.
• Investors typically use the laddered approach to match a steady liability stream and to reduce the risk of having to reinvest a significant portion of their money in a low interest-rate environment.

What most people don’t know is the bond market is substantially larger than the stock market. Now the reason for this post is the bond market is facing its first increase in interest rates in several years. What lies ahead are some interesting times for the bond market.

These bonds are typically high-quality and very liquid, although yields may not keep pace with inflation. Some agency bonds are fully backed by the U.S. government, making them almost as safe as Treasuries. These agencies classify bonds into 2 basic categories—investment-grade and below-investment-grade—and provide detailed ratings within each. Yield-to-Call is figured the same way as YTM, except instead of plugging in the number of months until a bond matures, you use a call date and the bond’s call price. This calculation takes into account the impact on a bond’s yield if it is called prior to maturity and should be performed using the first date on which the issuer could call the bond. Current yieldis the bond’s coupon yield divided by its market price. To calculate the current yield for a bond with a coupon yield of 4.5 percent trading at 103 (\$1,030), divide 4.5 by 103 and multiply the total by 100.

In return, the issuer agrees to pay you a specified rate of interest over the life of the bond and to repay the face value of the bond when it reaches maturity — that is, the date the bond comes due. Remember, bonds that have longer terms to maturity are usually priced lower and offer higher yields.

The purpose of this example is to say that rising rates are not a good reason to abandon your long-term allocation. When rates rise, bonds will eventually provide nominal returns equal to their yield over a time period equal to their duration, even if it takes an extended period of time. The primary purpose of your bond allocation is to decrease volatility of your overall portfolio – not to earn the biggest return possible. Even if bonds experience temporary losses as interest rates rise, the worst bond markets are not as severe as the worst stock markets. The yield to call is a calculation of the total return of a bond if held to the call date.

Some bonds will return the principal at maturity but not make coupon payments along the way. To compensate the investor, these so-called “zero-coupon bonds” are typically sold at a discount to par value. So, for example, you might buy a \$1,000 face value zero-coupon bond for \$800, and at maturity, you’ll receive the \$1,000 face value. Depending on the time to maturity, that discounted amount can be used to calculate an effective yield-to-maturity.

## Interest Rate Risk

Callable bonds are bonds that the issuer can repay early, sometimes after a period of several years, at a predetermined price. The attraction of callable bonds is that they typically offer higher rates than non-callable bonds. The US Treasury issues bonds to pay for government activities and service the national debt. Treasuries are considered to be extremely low-risk if held to maturity, since they are backed by „the full faith and credit“ of the US government. Because of their safety, they tend to offer lower yields than other bonds. Income from Treasury bonds is exempt from state and local taxes. Yield-to-Maturity is the rate of return you receive if you hold a bond to maturityandreinvest all the interest payments at the YTM rate.

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## Oscars 2020 gift bag includes 24-karat gold vape pen, free Botox, cruise

As if a shot at winning an Academy Award wasn’t exciting enough, all those nominated for acting and directing accolades will receive an over-the-top swag bag with contents reportedly valued at \$148,000. When you hear the phrase “gift bag,” you probably imagine some sweet treats, light libations, and maybe a candle or a pair of socks. Although the2020 Oscars gift bagsdoinclude some of these smaller items, they also offer things like \$25,000 worth of treatments from a plastic surgeon and a 12-day cruise on the world’s first ultra-luxury yacht (worth nearly \$80,000). We thought the2020 Grammys gift bagswere luxurious, but that was before we took a peek inside of what the 2020 Oscar nominees will receive ahead of Hollywood’s biggest night.

The famous gifting suites will also be open to nominees on the night of the ceremony and available at the GBK Brand Bar at the Kimpton La Peer Hotel in West Hollywood. There will also be skincare products, self-care beauty items such oscars gift bag 2020 as hemp oil and CBD capsules, plus alcohol, including a bottle of vodka in a box decorated with 23-carat edible gold flakes, reported Vogue. A 10-session personal training package with Alexis Seletzky, a Los Angeles-based trainer.

## Inside the 2020 Oscar Nominees‘ Swag Bag

Perhaps most controversially, a golden NFT tribute to the late Chadwick Boseman made its way in. And of course, in a truly pandemic-era move, all gift bags were reportedly delivered via Postmates. On February 9, 2020, the Oscars will be awarded at the Dolby Theatre in Los Angeles, and even the losers will go home with lavish consolation prizes. While just four actors and one director will bring home the gold in the top individual categories, all 24 nominees still get a six-figure gift bag courtesy of Distinctive Assets, a celebrity and product-placement marketing company. Scenic Eclipse is the world’s first ultra-luxury yacht , and the2020 Oscarsnominees will receive a 12-day cruise for two. Onboard, they can indulge in a spa sanctuary, butler service, eight restaurants, chef-prepared picnics, and excursions. The 2020 Oscars gift bag was valued at \$225,000, and Distinctive Assests reports per press release that the 2021 Oscars gift bag is worth six figures yet again.

What some movie buffs also love seeing are the gift bags full of expensive, designer items. Every year, Oscar nominees receive an assortment of goods ranging from wellness products to sweet treats. The swag bag, which has been organized by marketing firm Distinctive Assets for the past two decades, is given to nominees in the best actor and actress, supporting actor and actress, and director categories.

## What’s Been in the Bag?

Abrar Al-Heeti is a video producer for CNET, with an interest in internet trends, entertainment, pop culture and digital accessibility. She graduated with bachelor’s and master’s degrees in journalism from the University of Illinois at Urbana-Champaign. https://turbo-tax.org/ Abrar was named a Tech Media Trailblazer by the Consumer Technology Association in 2019, and a winner of SPJ NorCal’s Excellence in Journalism Awards in 2022. Though Illinois is home, she now loves San Francisco — steep inclines and all.

A stay at the Faro Cumplida lighthouse on La Palma, in Spain’s Canary Islands. “Every human being, regardless of wealth or fame, appreciates the simple joy of a gift. This material may not be published, broadcast, rewritten, or redistributed. Quotes displayed in real-time or delayed by at least 15 minutes.

## Here’s What Was Inside the Insane \$225,000 Oscars 2020 Gift Bags

Every year, entertainment marketing company Distinctive Assets produces the „Everyone Wins“ Nominee Gift Bags, which are delivered to Oscar nominees during the week leading up to the show. The 2021 Oscar nominees in the Best Actor and Actress, Best Director, and Supporting Actor and Actress categories will receive these indulgent goodie bags to celebrate their nominations.

### What was in the Grammy swag bag?

Popcorn that's described as “flavor wrapped” Skincare products made from figs and tofu. \$10,000 worth of Botox, fillers and chemical peels. CBD sleep aids.

Nominees will receive a trip to the destination spa Golden Door, which is located in San Diego, Calif. It was voted the No. 1 destination spa in the world by Conde Nast Traveler.

## Treatments and procedures from a plastic surgeon

The bags were given to the five nominees in each of the four acting categories as well as the nominees for “Best Director,” CNBC reported. The bags included everything a Hollywood star could dream of, including gold-infused olive oil and \$10,000 worth of plastic surgery. The gifts in the swag bags have only become more specialized, including this year’s bag of goodies. The 2020 Oscars, which took place Sunday, February 9, contains everything from a trip on the world’s first ultra-luxury expedition yacht to cosmetic procedures. For this year’s 92nd annual Oscars, which takes place Sunday, swag bags from marketing company Distinctive Assets will include trendy and expensive „wellness“ products likehydration kits and an eight-person cannabis edible dessert-tasting. These gift bags will be presented to the OSCAR Nominees in the major categories of Best Actor, Best Actress, Best Supporting Actor, Best Supporting Actress, Best Director, and the Host’s (James Corden, Keanu Reeves & Maya Rudolph).

• It costs anywhere from \$4,000 to \$50,000 to be included, Fary said.
• The total value of all 24 bags — usually its 25, but Scarlett Johansson was nominated for both best actress and best supporting actress this year — is approximately \$5.4 million, according to Forbes.
• Achieve beautifully smooth, shiny and healthy-looking hair at home.
• For 2021, Fary said in a Fortune interview, Distinctive Assets wanted the bags to feel like they had a bigger purpose, beyond being an assortment of freebies.
• Each bath bomb dissolves to reveal a full moon charged amethyst crystal.
• Technically, the Academy Awards handed out thank-you bags for nominees.