Question

Question 18 1 pts Acme Construction specializes in concrete work. Each job is a project and they rely heavily on part-time workers since project demand varies based on season, weather, and the number of projects to bid on. Based on supply and demand for laborer, the actual hourly pay varies throughout the year. Based on the previous years averages, the accounting department is using a standard value of $18 per hour for direct labor. On this project the number of direct labor hours was 21,800 at a total cost of $353,400. Calculate the Labor Rate Variance. This problem is a variation of the problem on page 207-208 chapter 24 Remember that when analyzing variances a negative result can be favorable in some cases and unfavorable in others and the same goes for positive results. You have to use some common sense. 0 -39,000 favorable 39,000 unfavorable 0 -1.78 unfavorable 1.78 favorable 0 -39,000 unfavorable 39,000 favorable

Answer 1

Solution: 16.21101 Actual rate= 353400/21800 39,000 Favorable LABOUR RATE VARIANCE=(Standard rate-actual rate)* actual hours (18-16.21101)*21800