Figure 5
Ebola Company has developed the following standards for one of its products:
The following activities occurred during the month of October:
The company records materials price variances at the time of purchase.

-Refer to Figure 5. Ebola's labour rate variance would be
A) £15,000 unfavorable
B) £15,000 favorable
C) £15,300 unfavorable
D) £15,300 favorable

Question

Figure 5
Ebola Company has developed the following standards for one of its products:
The following activities occurred during the month of October:
  The company records materials price variances at the time of purchase.
 
-Refer to Figure 5. Ebola's labour rate variance would be
A) £15,000 unfavorable 
B) £15,000 favorable 
C) £15,300 unfavorable 
D) £15,300 favorable

Quizplus · Accepted Answer

Labour rate variance = (Actual hours worked x Actual wage rate) - (Actual hours worked x Standard wage rate) 
= (11,000 x £15) - (11,000 x £14.70) 
= £165,000 - £150,000 
= £15,000 favorable.

Figure 5 Ebola Company Has Developed the Following Standards for One of One