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The organisation manufactures a mobile fitness device. The company uses standards to control its costs. The labor standards that have been set for one device
The organisation manufactures a mobile fitness device. The company uses standards to control its costs. The labor standards that have been set for one device are as follows: Standard hours: 18 minutes Standard rate per hour: $15.00 During August, 6,500 hours of direct labor time were needed to make 20,000 units of the device. The direct labor cost totalled $97,000 for the month.
a) What is the total labor spending variance, and is it favourable or unfavourable
b) What is the labor rate variance and the labor efficiency variance
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