E11-6 Lewis
Company’s standard labor cost of producing one unit of Product DD is 4 hours at
the rate of $12.00 per hour. During August, 40,600 hours of labor are incurred
at a cost of $12.15 per hour to produce 10,000 units of Product DD.
Instructions
(a) Compute the total labor variance.
(a) Compute the total labor variance.
(b)
Compute the labor price and quantity variances.
(c)
Repeat (b), assuming the standard is 4.1 hours of direct labor at $12.25 per
hour.
TUTORIAL PREVIEW
(a)
Total labor variance = (AH X AR) – ( SH X
SR )
= (40,600 X $12.15) – (40,000* X
$12.00)
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