Labour efficiency variance=Standard rate of labor*(Standard hours-Actual hours worked) | ||||
If the answer is positive, variance is favorable.Otherwise unfavorable. | ||||
Standard rate of labor=$14 per hour | ||||
Standard hours=24800*3=74400 | ||||
Actual hours worked=65000 hours | ||||
Labour efficiency variance=14*(74400-65000)=131600=$ 131600 F | ||||
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