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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.

##### Solution Summary

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

##### Solution Preview

Solutions

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

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