Exercise 23-6 Lewis Company\'s standard labor cost of producing one unit of Prod

Question

Exercise 23-6 Lewis Company's standard labor cost of producing one unit of Product DD is 3.2 hours at the rate of $12.1 per hour. During August, 44,000 hours of labor are incurred at a cost of $12.30 per hour to produce 13,500 units of Product DD Compute the total labor variance. Total labor variance Compute the labor price and quantity variances Labor price variance Compute the labor price and quantity variances, assuming the standard is 3.4 hours of direct labor at $12.45 per hour. Labor price variance s Labor quantity variance g Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 15 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

a) Total labour variance = (13500*3.2*12.10)-(44000*12.30) = 18480 Unfavorable

b) Labour price variance = (12.10-12.30)*44000 = 8800 Unfavorable

Labour efficiency variance = (13500*3.2-44000)*12.10 = 9680 Unfavorable

c) Labour price variance = (12.45-12.30)*44000 = 6600 Favorable

Labour efficiency variance = (13500*3.4-44000)*12.45 = 23655 favorable

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