Question

Mordica Company’s standard labor cost per unit of output is $19.00 (1.90 hours x $10.00 per hour). During August, the company incurs 2,090 hours of direct labor at an hourly cost of $11.00 per hour in making 1,000 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		$enter a dollar amount rounded to 2 decimal places		select an option                                                          UnfavorableFavorableNeither favorable nor unfavorable
Labor price variance		$enter a dollar amount rounded to 2 decimal places		select an option                                                          Neither favorable nor unfavorableUnfavorableFavorable
Labor quantity variance		$enter a dollar amount rounded to 2 decimal places		select an option                                                          UnfavorableNeither favorable nor unfavorableFavorable

Answer 1

Total labor variance = (19*1,000) - (2090*11) = 3990 Unfavorable
Labor price Variance = (SR-AR) *AH = (10 - 11)*2090 = 2090 Unfavorable
Labor quantity Variance = (SH-AH) *SR = (1.90*1,000 - 2090)*10 = 1900 Unfavorable