Sparta Landscaping Company established the following standard labor cost data to provide complete lawn care service (cutting, edging, trimming, and blowing) for a small lawn. Sparta planned each lawn to require 2 hours of labor at a cost of $18.00 per hour. The company actually serviced 500 lawns using an average of 1.75 labor hours per lawn. Actual labor costs were $19.20 per hour.
Required
a. Determine the total labor variance and indicate whether the variance is favorable (F) or unfavorable (U).
b. Determine the labor price variance and indicate whether the variance is favorable (F) or unfavorable (U).
c. Determine the labor usage variance and indicate whether the variance is favorable (F) or unfavorable (U).
d. Explain what could have caused the variances computed in Requirements b and c.