EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

4,900 hours × SR = $39,200 SR = $8.00 * $36,750 ÷ 4,900 hours ** $1,650 F + $800 U. *** When used with the formula, unfavorable variances are positive and favorable variances are negative. b. Labor efficiency variance = SR (AH – SH) $8 per hour (4,900 hours – SH) = $800 U $39,200 – $8 per hour × SH = $800* $8 per hour × SH = $38,400 SH = 4,800 hours * When used with the formula, unfavorable variances are positive and favorable variances are negative. Alternative approach to parts (a) and (b): Actual Hours of Standard Hours Allowed for Output, Input, at the at the Standard Rate Actual Rate Actual Hours of Input, (AH × AR) (AH × SR) (SH × SR)