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StuckinMyHouse book company is a boutique shop that produces a small selection of adult coloring books. The first quarter 2020 Master Budget was based on selling 1,200 units, with a direct labor cost of $3,600. The company experienced an unexpected surge in purchases, actually selling 2,300 coloring books. It spent $6,640 on direct labor. The one employee earned $10 per hour, as expected.
How much is the rate variance (aka efficiency variance) for direct labor?

Respuesta :

Kolawole845

Answer:

Labour rate variance  =    $260 favourable

Explanation:

The rate variance would be the difference between the standard labour cost of the 2,300 units sold and the actual labour cost

Standard labour cost  (3600/1200× 2300)      6,900

Actual labour cost                                             6, 640

labour rate variance                                       $260 favourable

The variance is favourable because the StuckinMyHouse book company saved $260 as a result of of his actual cost been less than the expected cost.

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