The standard cost of product 5252 includes 1.90 hours of direct labor at $14.60

Question

The standard cost of product 5252 includes 1.90 hours of direct labor at $14.60 per hour. The predetermined overhead rate is 22.00 per direct labor hour. During ?uly, the company incurred 4,000 hours of direct labor at an average rate of $14.90 per hour and $80,900 of manufacturing overhead costs. It produced 2,000 units Compute the total, price, and quantity variances for labor Total labor variance« Labor price variance Labor quantity variance Compute the total overhead variance Total overhead variance

Explanation / Answer

a Total labor variance=(4000*14.9)-(2000*1.9*14.6)= $4120 Unfavorable Labor price variance=4000*(14.9-14.6)= $1200 Unfavorable Labor quantity variance = 14.6*(4000-2000*1.9)= $2920 Unfavorable b Total overhead variance = 80900-(2000*1.9*22)= $2700 Favorable

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