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.)

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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