Question

Heavy Products, Incdeveloped standard costs for direct material and direct labor. In 2017. All estimated the following standard costs for one of their major products, the 10-gallon plastic container Budgeted quantity Budgeted price Direct materials 0.7 pounds 590 per pound Direct labor 0.05 hours 520 per hour During June, Heavy Products produced and sold 22,000 containers using 1 600 pounds of direct materials at an average cost per pound of 593 and 15.400 direct manufacturing labor - hours at an average wage of 52100 per ho The direct manufacturing labor price variance during June is O A. $15.400 favorable O B. $1237.200 unfavorable O c. 54,800 unfavorable OD. 515,400 unfavorable

Answer 1

Labor Price Variance = (Standard price-Actual price)* Actual Hours

The answer is provided as below:

	Standard Quantity for Actual output				Actuals
	Quantity	Price	Amount		Quantity	Price	Amount
Material	15400 =(0.7*22000)	90	1,386,000		1600	93	148,800
Labor	1100 =(0.7*22000)	20	22,000		15400	21	323,400

Labor Price variance for June = (20-21) *15400

                                                     = $ 15400 (unfavourable)