The following data were drawn from the records of Jordan Corporation. Planned vo

Question

The following data were drawn from the records of Jordan Corporation.

Planned volume for year (static budget) 3,800 units Standard direct materials cost per unit 3.60 pounds @ $ 2.10 per pound Standard direct labor cost per unit 3.50 hours @ $ 4.60 per hour Total expected fixed overhead costs $ 14,820 Actual volume for the year (flexible budget) 4,100 units Actual direct materials cost per unit 3.10 pounds @ $ 2.60 per pound Actual direct labor cost per unit 3.60 hours @ $ 4.30 per hour Total actual fixed overhead costs $ 10,820
a) Calculate the labor price and usage variances.

Explanation / Answer

Labour price variance = (Standard rate-actual rate)actual hours

= (4.6-4.30)14760

Labour price variance = 4428 F

Labour usage variance = (Standard hour-actual hour)Standard rate

= (4100*3.5-14760)*4.6

Labour usage variance = 1886 U

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