Question

Check Your State Application Stal D WileyPLUS X C Lopez Compan C A Company A o c tabor Data For C in October, Pine C Checa G n https://edugen.wileyplus.com/edugen/student/mainfruni d, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Open Assignment CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 23-5 Mordica Company's standard labor cost per unit of output is $27.37 (2.30 hours x $11.90 per hour). During August, the company incurs 2,663 hours of direct labor at an hourly cost of $11.31 per hour in making 1,200 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 Labor price variance Labor quantity variance Click if you would like to Show Work for this question: Open Show Work Question Attempts: Unlimited SAVE FOR LATER SUBMIT ANSWER Version 4.24.15:2 ment Privacy Policy | 2000-2019 Lohn Wiley & Sons, Inc. All Rights Reserved. A Divison of John Wiley & Sons Inc. 10) 113/2019 12 Type here to search

Answer 1

Labor price variance = (Standard price - Actual price) * Actual hours

Actual hours = 2663, Standard price = $11.9 per hour, Actual price = $11.31

Now, putting these values in the above formula, we get,

Labor price variance =  ($11.9 - $11.31) * 2663

Labor price variance = $0.59 * 2663

Labor price variance = $1571.17

Since the variance is positive, so it is a favorable variance.

Labor quantity variance = (Standard hours for actual units - Actual hours) * Standard price

Actual hours = 2663, Standard price = $11.90 per hour

Actual units = 1200, Standard hour per unit = 2.30 per unit

Standard hours for actual units =  = Actual units * Standard hour = 1200 * 2.30 = 2760

Now, putting these values in the above formula, we get,

Labor quantity variance = (2760 - 2663) * $11.90

Labor quantity variance = 97 * $11.90

Labor quantity variance = $1154.3

Since the variance is positive, so it is a favorable variance.

Total labor variance = Labor rate variance + Labor quantity variance

Total labor variance = $1571.17 + $1154.3

Total labor variance = $2725.47