A manager prepared the following table by which to analyze labor costs for the month: Actual hours at Actual rate is P10,000; Actual hours at Standard rate is P9,800 and Standard hours at Standard rate, P 8,820. What variance is P1,180?
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.
A manager prepared the following table by which to analyze labor costs for the month: Actual hours at Actual rate is P10,000; Actual hours at Standard rate is P9,800 and Standard hours at Standard rate, P 8,820. What variance is P1,180? *
idle labor variance
labor efficiency variance
labor spending variance
total labor variance
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