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Variance Analysis - Overhead variances, price and efficiency

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The standard cost of product 2525 includes 1.83 hours of direct labor at $13.90 per hour. The predetermined overhead rate is $20.60 per direct labor hour. During July, the company incurred 4,260 hours of direct labor at an average rate of $14.60 per hour and $69,276 of manufacturing overhead costs. It produced 1,900 units.

(a) Compute the total, price, and quantity variances for labor.

Total labor variance $ unfavorable
Labor price variance $ unfavorable
Labor quantity variance $ unfavorable

(b) Compute the total overhead variance.

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Solution Summary

Detailed calculation and explanation of overhead variances, and price and efficiency variances

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a. i. Labor price variance
Actual hours x (actual price ââ?¬" standard price)
4,260 x ($14.60 ââ?¬" ...

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