verify whether variances favorable of unfavorable: budgeted cost at actual volue would be 25344 (21.12*1200) and total variance to be explained is 2536 (unfavorable 27880-25344). what is the amount of variance that is attributed to the diffence between the budgeted and actual wage rate per hour. what is the amount of variance that is attributed to the change in labor productivity? what is the amount of variance that can be attributed tothe diffence between budgeted and actual volume
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.
verify whether variances favorable of unfavorable: budgeted cost at actual volue would be 25344 (21.12*1200) and total variance to be explained is 2536 (unfavorable 27880-25344).
what is the amount of variance that is attributed to the diffence between the budgeted and actual wage rate per hour.
what is the amount of variance that is attributed to the change in labor productivity?
what is the amount of variance that can be attributed tothe diffence between budgeted and actual volume
| budget | actual | |
| wage rate per hour | 16 | 17 |
| fixed hours | 320 | 320 |
| variable hours per relative value unit (RVU) | 1 | 1.1 |
| Relative Value unite (RVUs) | 1000 | 1200 |
| total labor hours | 1320 | 1640 |
| labor cost | 21120 | 27880 |
| cost per RVU | 21.12 | 23.23 |
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