Problem - Fundamentals of Variance Analysis
The following data reflect the current month's activity for Sills, Inc.:
Actual total direct labor 546,000
Actual hours worked 26,000
Standard labor-hours allowed for actual output (flexible budget) 27,000
Direct labor price variance 19,500 U
Actual variable overhead 132,6200
Standard variable overhead rate per standard direct labor-hour $5.25
Variable overhead is applied based on standard direct labor-hours allowed.
Required - Compute the labor and variable overhead price and efficiency variances.