Answer:
a) The total, price, and quantity variances for labor is $4,060 totally, $0.3 per direct labour, and 200 hours respectively
b) The total overhead variance is $36,100
Explanation:
The variance is the difference between actual figures and standard figures.
The actual hour taken for 1 unit in July is 2.0 hour, so the quantity variance for labor in per unit is 0.1 hour = 2.0 – 1.9; then the total quantity variance for 2,000 units produced in July is 200 hours = 0.1 x 2,000
The price variance for labor is $0.3 = $14.60 - $14.30
The total standard cost for labor in July is $54,340 = $14.3 x 1.9 hours x 2,000 units
The total actual cost for labor in July is $58,400 = $14.6 x 2.0 hours x 2,000 units
So the variance in total labor cost of July is $4,060 = $58,400 - $54,340
The standard overhead cost for 2,000 units is $44,000, while the actual overhead cost in July is $80,100. So the total overhead variance is $36,100
