Question

Action Enterprises recently used 13,000 labor hours to produce 7,400 completed units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll cost amounted to $148,200. If the standard labor cost per hour is $11.3, Action’s labor rate variance is (Do not round intermediate calculations.):

Answer 1

labor rate variance = $1300 Unfavorable

Step-by-step explanation:

given data

recently used = 13,000 labor hours

produce = 7,400

time = 2 hours

actual payroll cost = $148,200

standard labor cost per hour = $11.3

to find out

labor rate variance is

solution

we get here labor rate variance that is express as

labor rate variance = standard labor × recently used ...............1

put here value we get here labor rate variance that is

labor rate variance = 11.3 × 13,000 - 148,200

labor rate variance = $1300 Unfavorable

Answer 2

$1,300 Unfavorable

Step-by-step explanation:

Given that,

Labor hours used for production = 13,000

Completed units = 7,400 units

According to manufacturing specifications,

Each unit is anticipated to take two hours to complete,

Company's actual payroll cost amounted = $148,200

Action's labor rate variance:

= (SR × AH) - (AR × AH)

= [($11.3 × 13,000) - $148,200]

= $146,900 - $148,200

= $1,300 Unfavorable