A manufacturing company is expected to complete a task in 45 minutes. During a recent accounting period, 3,200 completed units were produced, resulting in the following labor variances: Labor rate variance: P520 favorable Labor efficiency variance: P2,800 unfavorable The standard labor rate is P14 per hour. What is the standard hours allowed for the work performed?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A manufacturing company is expected to complete a task in 45 minutes. During a recent accounting period, 3,200 completed units were produced, resulting in the following labor variances:
Labor rate variance: P520 favorable
Labor efficiency variance: P2,800 unfavorable
The standard labor rate is P14 per hour.
What is the standard hours allowed for the work performed?
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