Reference no: EM132591159

Bonnie's Doll Company produces handmade dolls. The standard amount of time spent on each doll is 2.0 hours. The standard cost of labor is $20 per hour. The company planned to make 8,000 dolls during the year but actually used 17,500 hours of labor to make 9,000 dolls. The payroll amounted to $344,750.

Required

Question 1: Should labor variances be based on the planned volume of 8,000 dolls or the actual volume of 9,000 dolls?

Question 2: Make a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours.

Question 3: Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).

Question 4: Compute the labor usage variance and indicate whether it is favorable (F) or unfavorable (U).