Answer:
Total variance=$37,800
This is unfavorable since the actual cost of labor exceeds the standard cost of labor
Explanation:
To calculate the total variance for production labor for the month, we need to adopt the following expression;
Total labor variance=Actual cost-standard cost of actual hours
step 1: Calculate actual cost of labor
Actual cost of labor=actual hours×actual rate
actual hours=25,200 labor hours
actual rate=$15.00 per hour
replacing;
Actual cost of labor=(25,200×15)=$378,000
Actual cost of labor=$378,000
Step 2: Calculate standard cost of actual hours
Standard cost=actual hours×standard rate
where;
actual hours=25,200 labor hours
standard rate=$13.50
replacing;
Standard cost=(25,200×13.5)=$340,200
Standard cost=$340,200
Step 3: Total variance
Total variance=(378,000-340,200)=$37,800
Total variance=$37,800
This is unfavorable since the actual cost of labor exceeds the standard cost of labor
