Problem 3 (10 points)
The following labor standards have been established for a particular product:
Standard hours per unit of output 3.2 hours
Standard labor rate $19.10 per hour
The following data pertains to operations concerning the product for last month:
Actual hours worked 5,500 hours
Actual total labor cost $105,050
Actual output 1,900 units
Required:
a) What is the labor rate variance for the month? Favorable or unfavorable? SHOW YOUR WORK.
(5 points)
b) What is the labor efficiency variance for the month? Favorable or unfavorable? SHOW YOUR
WORK. (5 points)
AQ X AP AQ x SP SQ x SP
Rate Variance Efficiency Variance