Do It! Review 11-3 Your answer is partially correct. Try again. The standard cos

Question

Do It! Review 11-3 Your answer is partially correct. Try again. The standard cost of product 5252 includes 1.90 hours of direct labor at $10.60 per hour. The predetermined overhead rate is $22.00 per dect labor hour. During July, the company incurred 4,000 hours of direct labor at an average rate of $10.90 per hour and $80,400 of manufacturing overhead costs. It produced 2,000 units. Compute the total, price, and quantity variances for labor. Total labor variance 3320 Labor price variance 1200 Labor quantity variance 2120 Unfavorable Compute the total overhead variance. Total overhead variance 7600

Explanation / Answer

a) Total labour variance = (2000*1.9*10.60)-(4000*10.90) = 3320 Unfavorable

Labour price variance = (10.60-10.90)*4000 = 1200 Unfavorable

Labour efficiency variance = (2000*1.9-4000)*10.60 = 2120 Unfavorable

b) Total overhead variance = Overhead applied-actual overhead

= (2000*1.9*22)-80400

Total overehad variance = 3200 Favorable

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