What is the amount of variance that is attributed to the difference between the budgeted and actual wage rate per hour?

Use the following data to calculate the variances.

The following information has been prepared for a home health agency.

Budget

Actual

Wage Rate per Hour

$16.00

$17.00

Fixed Hours

320

320

Variable Hours per Relative

Value Unit (RVU)

1.0

1.1

Relative Value Units (RVUs)

1,000

1,200

Total Labor Hours

1,320

1,640

Labor Costs

$21,120

$27,880

Cost per RVU

$21.12

$23.23

Budgeted costs at actual volume would be $25,344 ($21.12 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable.