The following data relate to direct labor costs for the current period: Line Item Description Value Standard costs 7,500 hours at $11.80 Actual costs 6,300 hours at $10.70 The direct labor rate variance is a. $21,090 unfavorable b. $6,930 favorable c. $21,090 favorable d. $14,160 favorable
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.
Subject - Acounting
The following data relate to direct labor costs for the current period:
| Line Item Description | Value |
|---|---|
| 7,500 hours at $11.80 | |
| Actual costs | 6,300 hours at $10.70 |
The direct labor rate variance is
a. $21,090 unfavorable
b. $6,930 favorable
c. $21,090 favorable
d. $14,160 favorable
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