Question

The standard direct labor cost per unit for a company was $24 (= $15 per hour...

The standard direct labor cost per unit for a company was $24 (= $15 per hour × 1.6 hours per unit). During the period, actual direct labor costs amounted to $145,600, 9,500 labor-hours were worked, and 6,600 units were produced.

Required:

Compute the direct labor price and efficiency variances for the period. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

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Answer #1
Actual Rate 145600/9500
Actual Rate 15.326
Standard Hours for Actual production 6600*1.6 10560
Direct Labor Price Variance (Actual Rate-Standard Rate)*Actual hours
Direct Labor Price Variance (15.326-15)*9500
Direct Labor Price Variance 3097 U
Direct Labor Efficiency Variance (Actual hours-Standard Hours)*Standard Rate
Direct Labor Efficiency Variance (9500-10560)*15
Direct Labor Efficiency Variance -15900 F
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