Simon Corporation had a favorable direct-labor efficiency variance of P6,000 for the period just ended. The actual wage rate was P0.50 more than the standard rate of P12.00. If the company's standard hours allowed for actual production totaled 9,500, how many hours did the firm actually work?
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.
Simon Corporation had a favorable direct-labor efficiency variance of P6,000 for the period just ended. The actual wage rate was P0.50 more than the standard rate of P12.00. If the company's standard hours allowed for actual production totaled 9,500, how many hours did the firm actually work?
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