Hartley Company’s standard labor cost per unit of output is $27.36 (2.4 hours x

Question

Hartley Company’s standard labor cost per unit of output is $27.36 (2.4 hours x $11.40 per hour). During August, the company incurs 2,600 hours of direct labor at an hourly cost of $11.63 per hour in making 1,100 units of finished product.

Compute the total, price, and quantity labor variances.

Total labor variance $_____________ Favorable, unfavorable, or neither Labor price variance $_____________ Favorable, unfavorable, or neither Labor quantity variance $_____________ Favorable, unfavorable, or neither

Explanation / Answer

Information as given in question is as shown below:

Variances are computed as under:

Standard Actual Units 1 1,100 Labour hours 2.4 2600 Rate per hour 11.4 11.63 Standard labour cost 27.36 30238

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