Exercise 23-6 Lewis Company\'s standard labor cost of producing one unit of Prod

Question

Exercise 23-6 Lewis Company's standard labor cost of producing one unit of Product DD is 4.00 hours at the rate of $12.00 per hour. During August, 40,600 hours of labor are incurred at a cost of $12.15 per hour to produce 10,000 units of Product DD Compute the total labor variance. Total labor variance Compute the labor price and quantity variances. Labor price variance Labor quantity variance Compute the labor price and quantity variances, assuming the standard is 4.10 hours of direct labor at $12.25 per hour. Labor price variance Labor quantity variance

Explanation / Answer

Total labor variance = (40600*12.15)-(10000*4*12)= 13290 Unfavorable Labor price variance =40600*(12.15-12)= 6090 Unfavorable Labor quantity variance =12*(40600-10000*4)= 7200 Unfavorable Labor price variance =40600*(12.15-12.25)= 4060 Favorable Labor quantity variance =12.25*(40600-10000*4.1)= 4900 Favorable

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