The following information is for Brennan Company’s September production: Standar

Question

The following information is for Brennan Company’s September production:

Standards:

Material         4.0 feet per unit @ $3.75 per foot

Labor             3.0 hours per unit @ $8.25 per hour

Actual:

Production     3,500 units produced during the month

Material         14,200 feet used; 14,700 feet purchased @ $3.70 per foot

Labor             10,400 direct labor hours @ $8.35 per hour

Refer to Brennan Company's data. What is the labor price variance?  Please round your answer to the nearest dollar.

Explanation / Answer

Labor rate variance = (Actual rate - Standard rate) * Actual hours worked

Actual rate = $8.35 per hour

Standard rate = $8.25 per hour

Actual hours worked = 10,400

Labor rate variance = ($8.35 -$8.25) * 10,400 = $1040 Unfav

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