Q1 Lawn Company's records for April disclosed the following data relating to direct labor: Actual labor cost (payroll) for April $ 40,000 Labor rate variance $ 5,000 favorable Labor efficiency variance $ 4,400 unfavorable Actual direct labor hours worked (AQ) 2,500 Lawn's total standard direct labor cost for the output in April was: Multiple Choice $45,000. $40,600. $49,400. $35,600.
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.
Q1
Lawn Company's records for April disclosed the following data relating to direct labor:
| Actual labor cost (payroll) for April | $ 40,000 | |
|---|---|---|
| Labor rate variance | $ 5,000 | favorable |
| Labor efficiency variance | $ 4,400 | unfavorable |
| Actual direct labor hours worked (AQ) | 2,500 |
Lawn's total standard direct labor cost for the output in April was:
-
$45,000.
-
$40,600.
-
$49,400.
-
$35,600.
-
$44,400.
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