Theoretical standards are based on goals that could be attained only under almos

Question

Theoretical standards are based on goals that could be attained only under almost perfect operating conditions.. An unfavorable materials price variance would be recorded as a credit to the Materials Price Variance account. The labor rate variance for the month is: The labor efficiency variance is: A company has established labor standards based on goals that could be attained on perfect operating conditions. These standards are referred to as The first detailed budget to be prepared in developing a master budget is usually The production budget

Explanation / Answer

16.

Labor rate variance = (Actual rate - Standard rate) x Actual hours worked

Where,

Actual rate = $10.20

Standard rate = $10

Actual hours worked = $80,580 / $10.20 = 7,900

Therefore,

Labor rate variance = ($10.20 - $10) x 7,900 = $1,580 Unfavorable

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