Answer:
a. Overall labor variance $4,000 Unfavorable
Labor rate variance $1,200 Unfavorable
Labor efficiency variance $2,860 Unfavorable
b. $2,300 Favorable
Explanation:
a. The calculation of total, price, and quantity variances for labor is detailed below:
1. Total labor variance = (Produced units × Direct labor hours × Rate per hour) - (Actual direct labor hours × Average wage rate)
= (2,000 × 1.90 × $14.00) - (4,000 × $14.30)
= $53,200 - $57,200
= $4,000 Unfavorable
Labor price variance = (Hourly rate - Average rate) × Actual direct labor hours
= ($14.00 - $14.30) × 4,000
= -$0.3 × 4,000
= $1,200 Unfavorable
Labor quantity variance = (Produced units × Direct labor hours - Actual direct labor hours) × Hourly rate
= (2,000 × 1.90 - 4,000) × $14.30
= (3,800 - 4,000) × $14.30
= -200 × $14.30
= $2,860 Unfavorable
b) Total overhead variance = Manufacturing overhead incurred - (Produced units × Direct labor hours × Predetermined overhead rate)
= $81,300 - (2,000 × 1.90 × $22.00)
= $81,300 - $83,600
= $2,300 Favorable