Chapter 26, Problem 6E

(a)

To determine

Variances: The variances are used to calculate the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference in between cost that is actually incurred and cost which was estimated by the business.

Total Labor Variance: The variance which is used to find the variation in the actually incurred direct labor cost and the estimated cost of the direct labor. It is the sum of labor price variance and the labor quantity variance.

Labor Price Variance: The difference of the rate paid to workers and rate that was supposed to be paid to the worker is called labor price variance.

Labor Quantity Variance: The difference between the amount that should have been paid for the hours worked and the amount that was supposed to be paid for the amount of hours that should have been worked is called labor quantity variance.

To determine: The total labor variance.

(b)

To determine

The labor price and quantity variances.

(c)

To determine

The labor price and quantity variances.