JKL Company is using a direct labor cost standard of 4 hours and a P12 wage rate per hour for one of its products. Planned production was 300 units, but actual production was 250 units, using for each unit 3 labor hours at a P13 wage rate. What is the labor price variance? Group of answer choices P750 unfavorable P900 unfavorable P1,200 favorable P750 favorable
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.
JKL Company is using a direct labor cost standard of 4 hours and a P12 wage rate per hour for one of its products. Planned production was 300 units, but actual production was 250 units, using for each unit 3 labor hours at a P13 wage rate. What is the labor price variance?
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