The standard direct labor cost per unit for a company was $7 (= $28 per hour 0.25 hours per unit). During the period, actual

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 touse.)

Actual Inputs at Standard Price Flexible Production Budget Actual Actual labor price (AP S18) x Actual quantity (AQ = 4,400 hours) of direct labor Standard labor price (SP $20) x Actual quantity (AQ 4,400 hours) of direct labor Standard labor price (SP $20) x Standard quantity (SQ- 4,000 hours) of direct labor allowed for actual output (AP AQ) (SP AQ) (SP X SQ) $18 4,400 $79,200 $20 x 4,400 - $88,000 $20 X 4,000 $80,000 Efficiency variance $88,000 $80,000 - $8,000 U Price variancea $79,200 $88,000 $8,800 F Shortcut formulas (AP AQ)-(SP AQ) -(AP-SP) AQ ($18 _ $20) x 4,400 $8,800 F -$20 x (4,400 4,000) $8,000 U Total variance $800 F