Chick-Fil-A are the Lord’s Calories (CLC) had the following direct labor amounts for the period: Standard Actual Quantity 2,000 hours 2,800 hours Price $18.00 per hour $12.00 per hour What is the price variance? $16,800 favorable price variance $12,000 unfavorable price variance $8,000 favorable price variance $2,400 unfavorable price variance
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.
Chick-Fil-A are the Lord’s Calories (CLC) had the following direct labor amounts for the period:
| Standard | Actual | |
| Quantity | 2,000 hours | 2,800 hours |
| Price | $18.00 per hour | $12.00 per hour |
What is the price variance?
$16,800 favorable price variance
$12,000 unfavorable price variance
$8,000 favorable price variance
$2,400 unfavorable price variance
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