2 Actual Hours of Actual Hours of Standard Hours Input, at the Input, at the Allowed for Output, Actual Rate Standard Rate at the Standard Rate (AH x AR) (AH x SR) (SH x SR) 625 hours x 1,200 hours* x $12 per hour $12 per hour $7,590 = $7,500 = $14,400 Rate Variance, Efficiency Variance, $0 $0,900 F Total Variance, $6,900 F *3,000 units x040 h0urs per unit: 1200 heurs Alternatively: Labour Rate Variance : AH (AR SR) 625 hours ($12 per hour* $12 per hour) : $0 *7,500 + 625 hours = $12 per hour Labour EfficienCy Variance = SR (AH SH) $12 per hour (625 hours 1,200 hours) = $6,900 F