Question

Sheffield Corp. manufactures a product with a standard direct labor cost of two hours at $18 per hour. During July, 1800 units were produced using 3800 hours at $18.30 per hour. The labor price variance was

Answer 1

Answer:

$1,140(A)

Explanation:

The labor price variance is computed as;

= (SP - AP) × AH

Where:

SP = Standard price hour = $18 per hour

AP = Actual price per hour = $18.30 per hour

AH = Actual hours used = 3,800

Labor price variance = ($18 - $18.30) × 3,800 hours

Labor price variance = $1,140 (A)

Therefore, the labor price variance was $1,140(A)