Shimano Company makes a product that is expected to require 6 hours of labor per unit of product. The standard cost of labor is $5.30. Shimano actually used 5.90 hours of labor per unit of product. The actual cost of labor was $5.20 per hour. Shimano made 1,600 units of product during the period. Based on this information alone, the labor price variance is: a. $848 favorable. b. $848 unfavorable. c. $944 unfavorable. d. $944 favorable.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Shimano Company makes a product that is expected to
require 6 hours of labor per unit of product. The standard
cost of labor is $5.30. Shimano actually used 5.90 hours of
labor per unit of product. The actual cost of labor was $5.20
per hour. Shimano made 1,600 units of product during the
period. Based on this information alone, the labor price
variance is:
a. $848 favorable.
b. $848 unfavorable.
c. $944 unfavorable.
d. $944 favorable.
Transcribed Image Text:Shimano Company makes a product that is expected to require 6 hours of labor per unit of product. The standard cost of labor is $5.30. Shimano actually used 5.90 hours of labor per unit of product. The actual cost of labor was $5.20 per hour. Shimano made 1,600 units of product during the period. Based on this information alone, the labor price variance is: a. $848 favorable. b. $848 unfavorable. c. $944 unfavorable. d. $944 favorable.
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