Exercise 11-6 (Video)

Lewis Companys standard labor cost of producing one unit of Product DD is 3.90 hours at the rate of $13.20 per hour. During August, 40,800 hours of labor are incurred at a cost of $13.30 per hour to produce 10,300 units of Product DD. (a) Compute the total labor variance.

Total labor variance

$

UnfavorableFavorableNeither favorable nor unfavorable

(b) Compute the labor price and quantity variances.

Labor price variance		$		Neither favorable nor unfavorableFavorableUnfavorable
Labor quantity variance		$		Neither favorable nor unfavorableUnfavorableFavorable

(c) Compute the labor price and quantity variances, assuming the standard is 4.20 hours of direct labor at $13.50 per hour.

Labor price variance		$		FavorableUnfavorableNeither favorable nor unfavorable
Labor quantity variance		$		FavorableUnfavorableNeither favorable nor unfavorable