Direct Labor Variances

# Direct Labor Variances - DIRECT LABOR VARIANCES...

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DIRECT LABOR VARIANCES The process of determining direct labor variances is the same as for determining the direct materials  variances . In completing the Weed-O order, Xonic, Inc. incurred 2,100 direct labor hours at an  average hourly rate of \$9.80. The standard hours allowed for the units produced were 2,000 hours  (1,000 gallons  ×  2 hours). The standard labor rate was \$10 per hour. Illustration  22-15  shows the  formula for the  total labor variance  and its calculation for Xonic, Inc.  Illustration 22-15    Formula for total labor variance The total labor variance is \$580 (\$20,580 - \$20,000) unfavorable. The formula for the  labor price variance  and the calculation for Xonic, Inc. are as follows.  Illustration 22-16    Formula for labor price variance For Xonic, Inc., the labor price variance is \$420 (\$20,580 - \$21,000) favorable.

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