Question
Exercise 8-14A Calculating and explaining labor price and usage variances LO 8-6 Russell and Sons, a CPA firm, established the following standard labor cost data
Exercise 8-14A Calculating and explaining labor price and usage variances LO 8-6
Russell and Sons, a CPA firm, established the following standard labor cost data for completing what the firm referred to as a Class 2 tax return. Russell expected each Class 2 return to require 4.6 hours of labor at a cost of $53 per hour. The firm actually completed 600 returns. Actual labor hours averaged 4.3 hours per return and actual labor cost amounted to $61 per hour.
Required
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Determine the total labor variance and indicate whether it is favorable (F) or unfavorable (U).
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Determine the labor price variance and indicate whether it is favorable (F) or unfavorable (U).
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Determine the labor usage variance and indicate whether it is favorable (F) or unfavorable (U).
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