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Evaluate and explaining labor price and usage variances
Exercise 22-14A Calculating and explaining labor price and usage variancesRaman and Sons, a CPA firm, established the following standard labor cost data for completing what the firm referred to as a Class 2 tax return. Raman expected each Class 2 return to require 4.0 hours of labor at a cost of $50 per hour. The firm actually completed 600 returns. Actual labor hours averaged 4.4 hours per return and actual labor cost amounted to $46 per hour.
Required
a. Evaluate the total labor variance and indicate whether it is favorable (F) or unfavorable (U).b. Determine the labor price variance and indicate whether it is favorable (F) or unfavorable (U).c. Evaluate the labor usage variance and indicate whether it is favorable (F) or unfavorable (U).
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