Question

We know the following totals:

Actual hours x Actual rate per hour = $125000

Standard rate per hour x Hours that SHOULD have been used for the actual production achieved = $121000

Standard rate per hour x actual hours = $149000

What is the TOTAL Labor Variance? (Note, I just want the
AMOUNT, not whether it was favorable or unfavorable.)

Answer 1

Total Labor variance

=

Standard labor cost - Actual Labor cost

=

$       1,21,000

-

$ 1,25,000

=

$             4,000

Unfavorable

Thus,

Total Labor variance is $ 4000

Working:

Standard labor cost

=

Standard rate per hour x Hours that SHOULD have been used for the actual production achieved(Standard hours)

=

$       1,21,000

Actual Labor cost

=

Actual hours x Actual rate per hour

=

$       1,25,000