Rockland comapny recently completed 2250 units of its single product, consuing 4650 labor hours that cost the firm $79050. each unit should have required 2 hours of labor time at $18 per hour. The company's labor efficiency variance is: a. 2700 F b. 4650 F c. 4650 U d. 2700 U
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.
Rockland comapny recently completed 2250 units of its single product, consuing 4650 labor hours that cost the firm $79050. each unit should have required 2 hours of labor time at $18 per hour. The company's labor efficiency variance is:
a. 2700 F
b. 4650 F
c. 4650 U
d. 2700 U
The variance is the difference between the actual data and standard output of the production. The direct labor efficiency variance is the difference between standard direct labor cost for standard and actual hours.
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