Question
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
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.
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Financial Accounting For School Administrators Tools For School
Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden
3rd Edition
1610487710, 978-1610487719
