Problem 3. What is the amount of variance that is attributed to the difference between...
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Problem 3. What is the amount of variance that is attributed to the difference between the budgeted and actual wage rate per hour? Use the following data to calculate the variances. The following information has been prepared for a home health agency. Budget Actual Wage Rate per Hour $16.00 $17.00 Fixed Hours 320 320 Variable Hours per Relative Value Unit (RVU) 1.0 1.1 Relative Value Units (RVUs) 1,000 1,200 Total Labor Hours 1,320 1,640 Labor Costs $21,120 $27,880 Cost per RVU $21.12 $23.23 Budgeted costs at actual volume would be $25,344 ($21.12 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable.
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