Question

the following labor standards have been established for a particular product: standard labor-hours per unit of output 7.6 hours standard labor rate $ 15.30 per hour the following data pertain to operations concerning the product for the last month: actual hours worked 9,700 hours actual total labor cost $ 145,500 actual output 1,000 units What is the labor rate variance for the month? F or U
What is the labor efficiency varaiance for the month? F or U

Answer 1

The following labor standards have been installed for a specific product well-known exertions-hours according to a unit of output 7.6 hours preferred labor cost of $ 15.30 in keeping with hour the subsequent statistics pertain to operations concerning the product for the last month: actual hours worked 9,700 hours real general exertions fee = $2,910 favorable.

exertions fee variance = $2,910 favorable

actual general hard work price _ $a hundred forty five,500

actual hours labored 9, seven hundred700

actual labor cost = $15 in step with hour

exertions fee variance = [Standard labor rate — Actual labor rate] x real exertions hours

= [$15.30 - $15] x 9,700 hours

= $2,910 favorable

notice for the reason that the actual exertions fee ($15) is lower than the standard labor rate ($15.30), the variance is

taken into consideration to be favorable.

Factors covered in exertions price consist of worker wages, payroll taxes, ill days, and benefits. If the value of exertions isn't always appropriately calculated, it is able to result in a product being priced incorrectly and, therefore, have a negative effect on income for a business enterprise.

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