Standard Cost Profile Lab Treatment SU #12 Expected Treatments = 1,000 Quantity

Question

Standard Cost Profile

Lab Treatment SU #12

Expected Treatments = 1,000

                              Quantity        Quantity       Unit        Variable    Average          Average

Resource         Variable            Fixed        Cost            Cost      Fixed Cost        Total Cost

Labor                   0.80               0.80        $ 16.00     $ 12.80        $ 12.80        $ 25.60

Supplies               7.00               0                  1.10          7.70                  0            7.70

                                                                                   $ 20.50      $     12.80         33.30

Actual Month Cost

Lab Treatment SU #12

Actual Treatments = 1,100

                              Quantity            Unit             Total

Resource            Used               Cost            Cost    

Labor                   1,600         $ 17.00         $ 27,200

Supplies               7,500             1.00             7,500

                                                                    $ 34,700

Determine the Price Variance – Labor?

Explanation / Answer

Labor price variance:

= Actual hours×Standard rate- Actual labor paid

= 1,700×$12-$27,200

= $6,800 Unfavourable

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