The Company budgeted 33.0 hours of direct labor per unit at $14.75 per hour to produce 300 replica door knobs. The 300 knobs were completed using 1100. hours of direct labor at $13.75 per hour. What is the direct labor rate variance?
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.
The Company budgeted 33.0 hours of direct labor per unit at $14.75 per hour to produce 300 replica door knobs. The 300 knobs were completed using 1100. hours of direct labor at $13.75 per hour. What is the direct labor rate variance?
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