A project budget shows labor costs of $85,000 and actual labor costs of $92,000. What is the labor cost variance?
Correct Answer
A) $7,000 unfavorable
Cost variance = Actual Cost - Budgeted Cost = $92,000 - $85,000 = $7,000. Since actual exceeds budget, this is unfavorable.
Why This Is the Correct Answer
Cost variance = Actual Cost - Budgeted Cost = $92,000 - $85,000 = $7,000. Since actual exceeds budget, this is unfavorable.
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