Question

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour. The job consisted of 8,000 units and was completed in 22.000 hours at a total labor cost of $269,500. What is the total labor cost variance?

Answer 1

Answers

1. 5,500 (Unfavorable)
2. 30,000 (Unfavorable)
3. $3.42

Total Labor Cost Variance = Actual Labor cos t-( Standard Hours * Standard Rate )

= 269,500-( 3*8000*11)= 5,500 Unfavorable (Answer)

Direct Material Quantity Variance ;

DMQ = (Actual Quantity - Standard quantity) * SR

= (150000-(4*30000))* 1 = 30,000 Unfavorable (Answer )

Standard cost Per one Unit of Product

Direct Material = SR*SQ = 1.2*0.85 = 1.02

Direct Labor = 0.1*15 = 1.5

Overhead = 0.1*9 = 0.9

Product Cost = 1.02+1.5+0.9 = 3.42 (Answer)