Required information Skip to question [The following information applies to the questions displayed below.] Roman Mfg.'s July production involved actual direct labor costs of $38,432 for 3,200 direct labor hours. The budget for the July level of production called for 3,300 direct labor hours at $12.00 per hour, using a standard cost system. Roman's labor rate variance for July is: Multiple Choice $1,168 favorable. $1,200 favorable. $32 unfavorable. $1,168 unfavorable.
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.
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[The following information applies to the questions displayed below.]
Roman Mfg.'s July production involved actual direct labor costs of $38,432 for 3,200 direct labor hours. The budget for the July level of production called for 3,300 direct labor hours at $12.00 per hour, using a standard cost system.
Roman's labor rate variance for July is:
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$1,168 favorable.
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$1,200 favorable.
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$32 unfavorable.
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$1,168 unfavorable.
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