# Bateh Company produces hot sauce. The following information is provided concerning its standard cost system for the year:Standard Data Actual Data Material1/8 lbs. @ \$7.50 per lb.Produced4,400 Labor24 mins. @ \$12 per hr.Materials cost\$7.40 per poundBudgeted fixed overhead\$28,350Materials used556 poundsBudgeted variable overhead\$4.50 per unitLabor worked1,610 hrs. totaling \$19,481Budgeted production4,500Actual overheadFixed \$20,000; Variable: \$28,400 How much is the labor quantity variance?

Question

Bateh Company produces hot sauce. The following information is provided concerning its standard cost system for the year:

 Standard Data Actual Data Material 1/8 lbs. @ \$7.50 per lb. Produced 4,400 Labor 24 mins. @ \$12 per hr. Materials cost \$7.40 per pound Budgeted fixed overhead \$28,350 Materials used 556 pounds Budgeted variable overhead \$4.50 per unit Labor worked 1,610 hrs. totaling \$19,481 Budgeted production 4,500 Actual overhead Fixed \$20,000; Variable: \$28,400

How much is the labor quantity variance?

check_circle

Step 1

The labor quantity variance helps in determining the areas of production process that used more labor hours than the anticipated labor hours. It is calculated by multiplying standard labor rate with the difference between standard hours and actual hours.

Step 2

Standard Hours = Unit produced × Standard hour per unit

= 4400 × (24 / 60)

= 4400 × 0.4

= 1760 hrs.

Given:

Actual hours = 1610

Standard rate = \$12.00

Formula to calculate labor price variance:

Labor quantity variance = Standard rate (Standard hours – Actual hours)                                       &n...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in 