Exercise 8-15A Determining the standard labor price LO 8-6

Stuart Car Wash, Inc. expected to wash 1,000 cars during the month of August. Washing each car was expected to require 0.3 hours of labor. The company actually used 295 hours of labor to wash 900 cars. The labor usage variance was $500 unfavorable.

Required

1. Determine the standard labor price.

2. If the actual labor rate is $14, indicate whether the labor price variance would be favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)