The following labor standards have been established for a particular product: Standard labor hours per unit of output Standard labor rate The following data pertain to operations concerning the product for the last month: 7,700 hours Actual hours worked. Actual total labor cost Actual output $ 137,830 1,800 units 4.1 hours $17.80 per hour Required: a. What is the labor rate variance for the month? b. What is the labor efficiency variance for the month?
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.
Please do not give solution in image format thanku
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
