Finch Car Wash, Incorporated expected to wash 1,000 cars during the month of August. Washing each car was expected to require 0.2 hour of labor. The company actually used 216 hours of labor to wash 930 cars. The labor usage variance was $540 unfavorable. Required a. Determine the standard labor price. b. If the actual labor rate is $13, calculate the labor price variance and indicate whether it would be favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). a Standard labor price. b. Total labor price variance
Finch Car Wash, Incorporated expected to wash 1,000 cars during the month of August. Washing each car was expected to require 0.2 hour of labor. The company actually used 216 hours of labor to wash 930 cars. The labor usage variance was $540 unfavorable. Required a. Determine the standard labor price. b. If the actual labor rate is $13, calculate the labor price variance and indicate whether it would be favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). a Standard labor price. b. Total labor price variance
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 7PB: Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid...
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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.
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