Brief Exercise 23-5 Open Show Work Brief Exercise 23-5 Mordica Company’s standar

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Brief Exercise 23-5

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Brief Exercise 23-5

Mordica Company’s standard labor cost per unit of output is $20.14 (1.90 hours x $10.60 per hour). During August, the company incurs 2,581 hours of direct labor at an hourly cost of $10.71 per hour in making 1,300 units of finished product.

Compute the total, price, and quantity labor variances. (Round answers to 2 decimal places, e.g. 52.75.)
Total labor variance $

UnfavorableFavorableNeither favorable nor unfavorable

Labor price variance $

FavorableUnfavorableNeither favorable nor unfavorable

Labor quantity variance $

Neither favorable nor unfavorableUnfavorableFavorable

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Explanation / Answer

Total labor variance $1,460.51 Unfavorable Labor price variance $283.91 Unfavorable Labor quantity variance $1,176.60 Unfavorable Standard hours (SH) 2470 1300*1.9 Standard rate (SR) 10.6 Actual hours (AH) 2581 Actual rate (AR) 10.71 Total labor variance (SR x SH) – (AR x AH) (10.6*2470)-(10.71*2581) -1460.51 Labor price variance (SR – AR) x AH (10.6-10.71)*2581 -283.91 Labor quantity variance SR x (SH – AH) 10.6*(2470-2581) -1176.6

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