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a company has a budgeted labor cost of $180,000 for the production of 30000 units per month. Each unit is budgeted to take 3 hours of labor. The actual labor cost during the month was $160,000 for 28,000 and 85,000 hours were worked. What is the favorable labor rate of pay variance?
budgeted: $180000/30000=6 per unit
$6/3hours =2 per unitactual: $160000/85000=$1.8823
variance: $2-$1.8823 *85000=10004.5Is my calculation correct?
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