1.
Hartley Company?s standard labor cost per unit of output is $24.36 (2.1 hours x $11.60 per
hour). During August, the company incurs 2,300 hours of direct labor at an hourly cost of $11.33
per hour in making 1,100 units of finished product.
Compute the total, price, and quantity labor variances.
Total labor variance
$ FavorableUnfavorableNeither favorable nor unfavorable
Labor price variance
$ FavorableUnfavorableNeither favorable nor unfavorable
Labor quantity variance
$ FavorableUnfavorableNeither favorable nor unfavorable
Solution
Total Labor Variance: = Total Hours X Hourly Cost
=2300X11.33
=26059
Favourable
Labor Price Vaiance= 11.60 - 11.33
=.27 Favorable
Labor Quantity VarianceB,
=23069Â Â Â Â Â Â Â Â Â Â Â Â Â 18 Favourities