In order to calculate _____ using cost plus markup, a seller needs to know two things the cost of the item in the market.
2 answers:
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Answer:
Labor Price Variance = 3,700 F
Labor Efficiency variance = $37,000 U
Explanation:
Labor Price Variance = (Standard Rate - Actual Rate) Actual Hours
Standard Rate Given = $20 per hour
Actual Cost = $198,300
Standard Rate Actual Hours = $20
10,100 hours = $202,000
Labor Price Variance = $202,000 - $198,300 = 3,700 Favorable
Labor efficiency Variance = (Standard Hours - Actual Hours) Standard Rate
Standard Hours for Actual Output = 5,500 1.5 = 8,250 hours
Actual Hours = 10,100 hours
Standard Rate = $20 per hour
Labor Efficiency variance = (8,250 - 10,100) $20 = - $37,000 Unfavorable as the amount is negative.
Final Answer
Labor Price Variance = 3,700 F
Labor Efficiency variance = $37,000 U