The following labour standards have been established for a particular product: standard labour hours per unit of output 2.0 hours standard labour rate = $15.00 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 3700 hours actual total labour cost $58000 actual output 2300 units what was the labour rate variance for the month? a)1295 favourable b) 2500 unfavorable c) 2950 favourable d) 2950 unfavourable
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 following labour standards have been established for a particular product:
standard labour hours per unit of output 2.0 hours
standard labour rate = $15.00 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked 3700 hours
actual total labour cost $58000
actual output 2300 units
what was the labour rate variance for the month?
a)1295 favourable
b) 2500 unfavorable
c) 2950 favourable
d) 2950 unfavourable
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