Answer:
Direct labor price(rate) variance = $1,675 (unfavorable)
Direct labor efficiency variance = 0
Explanation:
As per the data given in the question,
Number of units = 11,200
cost = $19 per unit
Labor budgeted = at 28 minutes per unit
Total budget = $100,800
Actual output = 8,900 units
Direct material expense = $137,500
Direct labor expense = $81,775
As per the following formula,
Direct labor price variance = (Actual price - Standard price) × Actual hour
= ($81,775 ÷ 8900 × 2 - $100,800 ÷ 11,200 × 2) × 8,900 ÷ 2
= $1,675 (unfavorable)
Direct labor efficiency variance = (Actual hour - Standard hour) × Standard price
= (8,900 × 28 ÷ 60 - 8,900 × 28 ÷ 60 ) × $100,800 ÷ 11,200 × 2
= 0
