all cricket 9:55 PM 36% edugen.wileyplus.com Exercise 23-6 Lewis Company\'s stan

Question

all cricket 9:55 PM 36% edugen.wileyplus.com Exercise 23-6 Lewis Company's standard labor cost of producing one unit of Product DD is 3.7 hours at the rate of $10.6 per hour. During August, 40,400 hours of Product DD ste labor are incurred at a cost of $10.75 per hour to produce 10,800 units of Compute the total labor variance. Total laber vanance Compute the labor price and quantity variances. Lator price vanance Labor quantiry variance s Compute the labor price and quantity variances, assuming the standard is 4.1 hours of direct labor at $10.95 per hour. Labor price variance Labor quantiry varilance Question Attempts: 0 of S u -an. E

Explanation / Answer

(A)

Total labour variance = Standard labour cost for actual production - Actual labour cost = (10800*3.7*10.6) - (40400*10.75) = 423576 - 434300 = 10724 (U)

(B)

Labour rate variance = Actual hour worked (Standard rate - Actual rate) = 40400 (10.6 - 10.75) = 40400 (0.15) = 6060 (U)

Labour quantity variance = Standard rate (Standard hour - Actual hour) = 10.60 (10800 * 3.7 - 40400) = 10.60 (440) = 4664 (U)

(C)

Labour rate variance = Actual hour worked (Standard rate - Actual rate) = 40400 (10.95 - 10.75) = 40400 (0.20) = 8080 (F)

Labour quantity variance = Standard rate (Standard hour - Actual hour) = 10.95 (10800 * 4.1 - 40400) = 10.95 (3880) = 42486 (F)

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