nal Exam Sevad Help Sevei Russell and Sons, a CPA firm, established the followin
ID: 2530287 • Letter: N
Question
nal Exam Sevad Help Sevei Russell and Sons, a CPA firm, established the following standard labor cost data for completing what the frm referred to as a Class 2 tax return. Russell expected each Class 2 return to require 4.4 hours of labor at a cost of $52 per hour. The firm actualy completed 650 returns. Actual labor hours averaged 4.2 hours per return and actual labor cost amounted to $59 per hour Required a. Determine the total labor variance and indicate whether it is favorable (F) or unfavorable (U) b. Determine the labor price variance and indicate whether it is favorable (F) or unfavorable (U) Determine the labor usage variance and indicate whether it is favorable (F) or unfavorable (U) (For all requirements, do not round intermediate colculetions and select "None" if there is no effect (i.e., zero variance).) a Total labor variance b Total labor price variance c Tolal labor usage variance to searchExplanation / Answer
Total labour variance = (650*4.4*52)-(650*4.2*59) = 12350 U
Labour rate variance = (52-59)*2730 = 19110 U
Labour usage variance = (650*4.4-2730)*52 = 6760 F
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