What is the formula to determine labor cost variance given 128 scheduled hours and 137 used hours at $14.75 per hour?

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To determine labor cost variance, the formula focuses on the difference between the scheduled hours and the actual hours worked, multiplied by the hourly wage rate. In this scenario, the calculation involves subtracting the scheduled hours from the actual hours used, which results in the additional hours worked beyond what was planned.

Using the provided information:

  1. The scheduled hours are 128.

  2. The actual hours used are 137.

  3. The hourly wage rate is $14.75.

When calculating variance, we are specifically interested in the additional hours that contributed to the increased cost. Therefore, the difference in hours worked is (137 - 128).

Next, to find the cost associated with those excess hours, we multiply the additional hours (9) by the hourly wage of $14.75. This shows how much labor cost was over the budget due to the additional hours worked.

Thus, the correct formula to calculate labor cost variance is (137 - 128) * 14.75, which conveys not just the hours over but integrates the cost impact clearly. Understanding this helps ensure accurate financial tracking and management of labor in a hospitality setting.

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