Answer:
The correct answer for (a) is 12,144 ( Favorable), (b) is 26,400 ( Unfavorable), and (c) is 14,256 ( unfavorable).
Explanation:
According to the scenario, the computation of the given data are as follows:
(a) We can calculate the rate variance by using following formula:
Rate variance = Actual hours × ( Standard rate - Actual rate)
= 27,600 × ( $22 - $22.44)
= -$12,144 ( Favorable)
(b). We can calculate the time variance by using following formula:
Time variance = Standard rate × ( Standard hours - Actual hours)
= $22 × ( 6 × 4,800 - 27,600)
= 26,400 ( Unfavorable)
(c). We can calculate the cost variance by using following formula:
Cost variance = Time variance - rate variance
= 26,400 - 12,144
= 14,256 ( unfavorable)
