In: Accounting
Lewis Company’s standard labor cost of producing one unit of
Product DD is 3.10 hours at the rate of $12.70 per hour. During
August, 42,200 hours of labor are incurred at a cost of $12.80 per
hour to produce 13,500 units of Product DD.
(a)
Compute the total labor variance.
Total labor variance | $enter the Total labor variance in dollars | select an option FavorableNeither favorable nor unfavorableUnfavorable |
Compute the labor price and quantity variances.
Labor price variance | $enter a dollar amount | select an option UnfavorableNeither favorable nor unfavorableFavorable | ||
---|---|---|---|---|
Labor quantity variance | $enter a dollar amount | select an option UnfavorableFavorableNeither favorable nor unfavorable |
Compute the labor price and quantity variances, assuming the
standard is 3.40 hours of direct labor at $12.95 per
hour.
Labor price variance | $enter a dollar amount | select an option FavorableUnfavorableNeither favorable nor unfavorable | ||
---|---|---|---|---|
Labor quantity variance | $enter a dollar amount | select an option Neither favorable nor unfavorableUnfavorableFavorable |
A)
Number of hours | * | Rate per Hour | = | Total cost | |
Actual | 42200 | 12.8 | 540160 | ||
Standard cost | 13500*3.1=41850 | 12.7 | 531495 |
Total Labor variance = Actual cost-standard cost
= 540160 -531495
= $ 8665 U
2)
Labor price variance = AH[AR-SR]
= 42200 [12.8 -12.7]
= 42200 * .1
= 4220 U
Labor quantity variance =SR[AH-SH]
= 12.7 [42200 - 41850 ]
= 12.7 * 350
= 4445 U
3)
Total standard hours = 13500*3.40=45900 Hours
Labor price variance = AH[AR-SR]
= 42200 [12.8 -12.95]
= 42200 * - .15
= -6330 F (Enter as 6330 F if needs to be enter as positive value)
Labor quantity variance =SR[AH-SH]
= 12.95 [42200-45900]
= 12.95 * - 3700
= - 47915 (Enter as 47915 F if needs to be enter as positive value)