Actual total direct labor $ 655,200 Actual hours worked 37,700 Standard labor-hours allowed for actual output (flexible budget) 36,500 Direct labor price variance $ 23,400 F Actual variable overhead $ 157,120 Standard variable overhead rate per standard direct labor-hour $ 4.20

Complete question "Variable overhead is applied based on standard direct labor-hours allowed.   Required: Compute the labor and variable overhead price and efficiency variances.

a. Direct labor

Direct labor price variance = (actual rate - standard rate)*actual hrs  

(655,200-37700*x) = 23400  

x = (655200+23400)/37700  

x = 18

Efficiency variance = (Actual hrs - standard hrs allowed)*standard rate  

= (37,700 - 36500)*18

= 21600 U

I. Price variance = 23,400 F  

II. Efficiency variance = 21,600 U

b.  Variable overhead

Price variance = (Actual rate - standard rate)*actual hrs  

= (157120 - 37700*4.2)

= 1220 F    

Efficiency variance = (Actual hrs - standard hrs allowed)*standard rate  

= (37700-36500)*4.2

= 5040 U

I. Price variance = 1,220 F

II. Efficiency variance = 5,040 U

check the picture below.

the perimeter is increased by a factor of 2