Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 27

Variable Cost Variances

The standard direct labor cost per unit for a company was $7 (= $28 per hour × 0.25 hours per unit). During the period, actual direct labor costs amounted to $45,000, 1,600 labor-hours were worked, and 5,600 units were produced.

Required

Compute the direct labor price and efficiency variances for the period. (Refer to Exhibit 16.9 for the format to use.)