A company had a total labor variance of $15,000 favorable and a labor efficiency variance of $18,000 unfavorable. The labor price variance was Accounting MCQs | Accounting MCQs

A company had a total labor variance of $15,000 favorable and a labor efficiency variance of $18,000 unfavorable. The labor price variance was

$3,000 favorable.$3,000 unfavorable. $33,000 favorable.$33,000 unfavorable.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (C) is correct. The total variance for labor consists of a price (rate) variance and an efficiency (usage) variance. Since the total variance is $15,000 favorable, the price variance must be $33,000 favorable (–$18,000 + $33,000 = $15,000).