Firm K produced 45,000 radios using 9,000 hours of labor in 2003; total labor costs were...
Firm K produced 45,000 radios using 9,000 hours of labor in 2003; total labor costs were $54,000. In 2004, firm K produced 48,000 radios using 8,000 hours of labor; total labor costs were $40,000.
The labor price variance is ____ and the labor volume variance is _____ and the labor efficiency variance is ____?
Homework Answers
Labour price variance is calculated as
Actual price per hour of labour – budgeted rate of labour per hour.
.83-1.2 hence the labour price variance is positive
This is .37 per unit.
Labour volume variance is
Actual labour hour per units- budgeted labour hour per unit
.16-.20
=favorable .04
Labor efficiency variance is
Production per unit as per actual data- production per unit as per budget.
6-5
= favorable 1 unit of efficiency per hour.
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