Brief Exercise 11-5 Mordica Company’s standard labor cost per unit of output is
ID: 2529939 • Letter: B
Question
Brief Exercise 11-5
Mordica Company’s standard labor cost per unit of output is $19.00 (1.90 hours x $10.00 per hour). During August, the company incurs 1,957 hours of direct labor at an hourly cost of $10.10 per hour in making 1,000 units of finished product.
Compute the total, price, and quantity labor variances. (Round answers to 2 decimal places, e.g. 52.75.)
Neither favorable nor unfavorableFavorableUnfavorable
Labor price variance $UnfavorableFavorableNeither favorable nor unfavorable
Labor quantity variance $UnfavorableFavorableNeither favorable nor unfavorable
Explanation / Answer
Answer:
Total labor variance
765.7
Unfavorable
Labor price variance
195.7
Unfavorable
Labor quantity variance
570
Unfavorable
Working notes for the above answer is as under
Direct Labor rate and efficiency variance
Actual Labor Cost
Projected Labor Cost
Standered Labor Cost
Actuual
Hours
x
Actual
rate
Actuual
Hours
x
Standered
rate
Standered
Hour
x
Standered
rate
1957
x
10.1
1957
10
1900
10
(1000*1.9)
19765.7
19570
19000
195.7
Unfavorable
570
Unfavorable
Direct Labor rate Variance
Quantity Variance
765.7
Unfavorable
Total Labor Variance
Total labor variance
765.7
Unfavorable
Labor price variance
195.7
Unfavorable
Labor quantity variance
570
Unfavorable
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