Vaughn Manufacturingproduces a product requiring 3 direct la

Vaughn Manufacturingproduces a product requiring 3 direct labor hours at $16.00 per hour. During January, 3000 products are produced using 9300 direct labor hours. Vaughn’s actual payroll during January was $145080. What is the labor quantity variance?

Solution

Answer

Standard Hours = Actual Product * Direct Labor Hours per product

= 3,000 Products * 3 Labor hours

Standard Hours = 9,000 Hours

Actual Hours = 9,300 Hours

Standard Rate = $16 per hour

Direct Labor Quantity Variance = (Standard Hours – Actual Hours) * Standard Rate

= (9,000 – 9,300) * 16

Direct Labor Quantity Variance = -$4,800

Direct Labor Quantity Variance = $4,800 Unfavorable