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    Skooby's Avatar
    Skooby Posts: 7, Reputation: 1
    New Member
    		  
    #1

    Oct 6, 2009, 02:31 AM
    How do you find Actual Price for labor rate variance when it's not given?
    The question asks for labor rate and labor efficiency variance.
    Also to find total actual payroll.

    It does not give the actual price and I don't know how to find it.

    Actual price:??
    Actual quantity: 270 labor hours
    Standard price: $45 per hour
    Standard quantity: 300 labor hours

    Total labor variance was $500 unfavorable.

    How do I find actual price?

    So far I have the labor efficiency variance at $1350 Favorable... is that right?
    Skooby's Avatar
    Skooby Posts: 7, Reputation: 1
    New Member
    		  
    #2

    Oct 6, 2009, 02:58 AM
    Quote Originally Posted by Skooby View Post
    The question asks for labor rate and labor efficiency variance.
    Also to find total actual payroll.

    It does not give the actual price and I don't know how to find it.

    Actual price: ???
    Actual quantity: 270 labor hours
    Standard price: $45 per hour
    Standard quantity: 300 labor hours

    Total labor variance was $500 unfavorable.

    How do I find actual price?

    So far I have the labor efficiency variance at $1350 Favorable...is that right?
    Oh,

    $1350 = (300-270) * 45
    or
    (45 * 270) - (45 * 300)
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #3

    Oct 6, 2009, 06:01 AM
    Quote Originally Posted by Skooby View Post
    The question asks for labor rate and labor efficiency variance.
    Also to find total actual payroll.

    It does not give the actual price and I don't know how to find it.

    Actual price: ???
    Actual quantity: 270 labor hours
    Standard price: $45 per hour
    Standard quantity: 300 labor hours

    Total labor variance was $500 unfavorable.

    How do I find actual price?

    So far I have the labor efficiency variance at $1350 Favorable...is that right?
    Labor efficiency variance is correct. Since the total labor variance is unfavorable it means that the labor rate variance must be $1350 + 500 = $1,850 unfavorable. Divide this amount by actual hours you get the price differential, that is the difference between the standard rate and the actual rate. Add this differential to the standard rate and you have the actual price.
    Skooby's Avatar
    Skooby Posts: 7, Reputation: 1
    New Member
    		  
    #4

    Oct 10, 2009, 08:42 AM
    Thanks
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