Information for Garner Company’s direct-labor costs for the month of September was as follows: Actual direct-labor hours 34,500 hours Standard direct-labor hours
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.
Information for Garner Company’s direct-labor costs for the month of September was as follows:
Actual direct-labor hours 34,500 hours
Standard direct-labor hours 35,000 hours
Total direct-labor payroll $241,500
Direct-labor efficiency variance—favorable $3,200
What is Garner’s direct-labor price (or rate) variance?
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