Japan Company produces lamps that require 3 standard hours per unit at a standard hourly rate of $11.80 per hour Production of 6,000 units required 18,360 hours at an hourly rate of $12.20 per hour.. What is the direct labor (a) rate variance, (b) time variance, and (c) total cost vanance? Enter favorable variances as negative numbers. a. Direct labor rate vanance b. Direct labor time variance c. Total direct labor cost variance

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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.