During January, LP Ray Company incurs 2,250 hours of direct labour at an hourly cost of $10.10 in producing 1,250 units of its finished Ray's standard labour cost per unit of output is $18.45 (1.75 hours × $10.25). Calculate the price labour variances for Ray Company for January
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.
During January, LP Ray Company incurs 2,250 hours of direct labour at an hourly cost of $10.10 in producing 1,250 units of its finished Ray's
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